Sources exclusively revealed to Reuters that Sri Lanka is negotiating with India to extend a $1 billon credit line by a few months as the island nation tries to line up funds for the remainder of the year while the IMF looks prepared to approve a $2.9 billion loan. The extension talks come as the economy improves and forex reserves rise for Sri Lanka, where huge protests took place last year amid widespread shortages of essentials after the COVID-19 pandemic hurt tourism and remittances while exposing low tax revenues.

Market Impact

Sri Lanka’s central bank said on Tuesday that the country’s official reserves had risen by 4.5% to $2.22 billion in February (vs. previous month). China and India are Sri Lanka’s biggest lenders and both seek influence on the island located on a busy shipping route on the Indian Ocean.

Article Tags

Topics of Interest: Economy

Type: Reuters Best

Sectors: Economy & Policy

Regions: Asia

Countries: Sri Lanka

Win Types: Exclusivity

Story Types: Exclusive / Scoop

Media Types: Text

Customer Impact: Significant National Story

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