Sri Lankan finance minister Basil Rajapaksa will begin his visit to New Delhi on Tuesday, hoping to finalise a $1 billion line of credit (LoC) even as the island nation is tackling its worst financial crisis in more than a decade.
The visit was finalised during a telephone conversation between minister Rajapaksa and external affairs minister S Jaishankar last week. Sri Lanka is effectively devaluing its currency as its foreign reserves dwindle and Colombo is struggling to service its debt and pay for imports. On Saturday, the Lankan central bank tightened trade restrictions, ordering exporters to repatriate foreign exchange earnings within 180 days of transactions, in a bid to improve the country’s depleting forex reserves.
Colombo, with just $2.31 billion of reserves, is struggling to pay for critical imports including fuel, food and medicines. Lanka will begin talks with the International Monetary Fund (IMF) next month on a plan. Rajapaksa will travel to Washington in mid-April to present Sri Lanka’s proposal to the IMF.
Ahead of Rajapaksa’s visit in an effort to boost Lankan economy, a joint venture project between the Ceylon Electricity Board and India’s largest energy conglomerate, NTPC, was inked last Friday to set up a 100 MW solar power plant at Sampur, Trincomalee.
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