Sri Lankan Prez to visit India to find a way out of economic turmoil

The island nation has been scrambling for dollars, leading to a shortage of food, medicines as well as essential items.

FPJ Web DeskUpdated: Thursday, October 06, 2022, 08:07 PM IST
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Ranil Wickremesinghe was elected President amid mass protests across Sri Lanka in July 20222. |

Sri Lankan President Ranil Wickremesinghe announced in Parliament on Thursday that he hopes to visit New Delhi to discuss the island nation's worst economic crisis.

Briefing the House on his recent visits to Japan, Singapore, and the Philippines, the President said: "We are continuing our talks with India. During my brief meeting with Prime Minister Modi in Japan, I conveyed my wish to visit New Delhi to brief them on our situation.", said the President, who took charge after then president Gotabaya Rajapaksa fled Colombo in the face of the country's worst economic crisis since 1948.

"Modi has always extended his support to us. I have always appreciated India's assistance in our crisis. India will continue to extend their support in our rebuilding effort." said Wickremesinghe. India since January this year has extended nearly USD 4 billion worth of assistance to Sri Lanka after the country in April this year announced itself bankrupt and expressed its inability to honour debts.

The island nation has been scrambling for dollars, leading to a shortage of food, medicines as well as essential items.

India's credit lines to provide essential food and fuel proved a lifeline to Sri Lanka in the early stage of the crisis. India stands as a key player in Sri Lanka's debt restructuring process, a prerequisite to the International Monetary Fund (IMF) facility bailout.

Having agreed to a staff-level agreement for a USD 2.9 billion facility over four years, the IMF has asked Sri Lanka to start debt restructuring with its creditors. India with 12 percent is in the third position in the list of Sri Lanka's bilateral creditors behind China and Japan with 52 and 19 percent.

The President also said that Sri Lanka hoped to reach a common agreement with creditor nations including Japan, China, and India, adding that Japan was ready to assist the bankrupt nation in the reconciliation process.

Wickremesinghe said that the island nation will only be able to secure an IMF assurance after reaching an agreement with the creditor nations and private lenders. The President said that Sri Lanka after signing an agreement with creditor nations will be able to access bridging finance with lenders like the World Bank and the Asian Development Bank.

Sri Lanka hopes to access around USD 1 billion through bridging finance. The President further said that the Asian Development Bank has agreed to provide USD 500 million in loans to Sri Lanka. 

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