Finance Minister’s visit to India being finalised

Finance Minister Basil Rajapaksa will visit New Delhi later this month, Indian authorities said, following his telephone conversation with External Affairs Minister Dr. S. Jaishankar on Monday, amid a severe economic meltdown stifling the island nation.

“EAM @DrSJaishankar and Finance Minister @RealBRajapaksa had a productive and cordial telephone conversation a while ago. EAM assured that #India will continue to support #SriLanka in all possible ways. They agreed to finalise a mutually convenient date in the second half of this month for the visit of @RealBRajapaksa to #India,” the Indian High Commission said in a tweet on Monday night.

From January, India has extended support totalling over US$ 1.4 billion to Sri Lanka, by way of a US$ 400–million currency swap, a US$ 500–million loan deferment, and a US$ 500–million Line of Credit for fuel imports.

A further US$ 1 billion assistance under negotiations is being “fast–tracked” and in its “final stages” before likely confirmation during the Minister’s visit, diplomatic sources told The Hindu.

This would be Minister Basil Rajapaksa’s second visit amid Sri Lanka’s unprecedented economic crisis, marked by a fuel and food shortages, and long power cuts across the country. He was in India early in December, when the two countries agreed on a four–pronged plan that included emergency Lines of Credit and a currency swap to boost Sri Lanka’s fast–draining foreign reserves.

For months now, Sri Lanka has been cash–strapped, with insufficient dollars to pay for the import of essential goods. Despite broad import restrictions imposed by the Government to save dollars, the island nation is struggling to cope, and the Government is exploring different avenues for urgent assistance.

Late on Monday, Sri Lanka’s Central Bank devalued the rupee by 15%, setting an exchange rate limit of LKR 230 against the US Dollar, increasing it from the 200-203 that prevailed since October 2021.

Colombo awaits an official word on a possible visit by Prime Minister Narendra Modi and Dr. Jaishankar for the BIMSTEC summit in Colombo hosted by Sri Lanka in March. (The Hindu)