Sri Lanka seeks $500 million loan from India
May 24, 2022 12:28
The Sri Lankan Cabinet has approved seeking a 500 million dollar loan from the Exim Bank of India for the purchase of petroleum products amid a severe foreign exchange crisis in the island nation.
Sri Lanka has been mulling different options to facilitate measures to prevent fuel pumps from going dry, as the country faces a severe foreign exchange crisis to pay for its imports.
The country is grappling with an unprecedented economic turmoil, the worst since its independence from Britain in 1948. It is struggling with a shortage of almost all essentials, due to the lack of dollars to pay for the imports.
At the Cabinet meeting held on Monday, a proposal was approved to seek an Indian Exim Bank loan to purchase fuel, Energy Minister Kanchana Wijesekera said on Tuesday.
In the present economic conditions prevailing approval was granted for the proposal by the power and energy minister to seek a 500 million dollar loan from the Indian Exim Bank for the purchase of petroleum products, a Cabinet note said. Sri Lanka had already received 500 million dollars from the Exim Bank of India and another 200 million from the State Bank of India for oil purchases, Wijesekara said.
From June, Sri Lanka is estimated to need 530 million US dollars for fuel imports in the current forex crisis. Crisis-hit Sri Lanka on Tuesday and also raised the petrol price by 24.3 per cent and diesel by 38.4 per cent, a record hike in fuel prices amidst the country's worst economic crisis due to the shortage of foreign exchange reserves.
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