SL Finance Minister flies to India to sign US$ 1 billion agreement

Sri Lankan Finance Minister Basil Rajapaksa left the island for India on a 2-day official tour a short while ago (after 5 pm) on Tuesday following his meeting with visiting IMF Asia and Pacific Department Director Changyong Rhee.

He was accompanied by Finance Ministry Secretary S.R Atygalle keeping the Treasury virtually headless for couple of days, official sources said. The mission is aimed at seeking assistance which would temporarily bail-out Sri Lanka’s economic crisis compounded by a shortage of dollars.

The IMF has said the country’s debt is unsustainable but is willing to assist the country in whatever way. However Sri Lanka is reluctant to agree to an IMF package to stave off a debt problem as it would involve unpalatable decisions on the island’s economy.

The aim of the New Delhi visit is to sign the agreement to obtain a loan facility of US$.1 billion to purchase essential food items, fuel, medicinal drugs and other commodities. 

This visit was postponed twice before as the Indian side was not ready to receive the Sri Lankan Finance Minister for various reasons including Colombo giving in to several demands. In this context, Colombo has signed various deals with Indian state and private companies for solar power and wind power projects.

Measures will be taken to formalise India’s economic relief package for the island nation which is facing a serious forex crisis, a senior Finance Ministry official said. 

This will be Mr. Rajapaksa's second visit to New Delhi recently. In January, India announced a $ 900 million loan to Sri Lanka to build up its depleted foreign reserves and for food imports, he added. (Bandula)