Lanka set to get $100 mn aid from AIIB
The China-backed Asian Infrastructure Investment Bank (AIIB) is considering granting $100 million in emergency support to Sri Lanka, the country’s finance ministry said on Sunday.
Sri Lanka has requested foreign-exchange liquidity support for state banks from the lender, it said in a statement.
Hit hard by the pandemic, rising oil prices and populist tax cuts by the government of President Gotabaya Rajapaksa, the South Asian island’s economy is in crisis, with usable foreign reserves down to $50 million, Finance Minister Ali Sabry said last week.
Shortages of imported food, fuel and medicines have brought thousands onto the streets in over a month of mostly peaceful protests. Rajapaksa declared a second state emergency in five weeks on Friday.
The multilateral AIIB, founded in 2014 to promote infrastructure investing throughout Asia, draws most of its funding from China.
China is Sri Lanka’s largest bilateral lender, with an outstanding balance of $6.5 billion mostly lent over the past decade for large infrastructure projects, including highways, a port, an airport and a coal power plant.
Beijing has extended Sri Lanka a $1.3 billion syndicated loan and a $1.5 billion yuan-denominated swap to boost its reserves. The two countries are in talks for a $1.5 billion credit line and a fresh syndicated loan of up to $1 billion.
Colombo said this month that talks had started on refinancing Chinese debt after Sri Lanka suspended some of external debt repayments in April.
Sri Lanka's main Opposition SJB said on Sunday that it has rejected an offer by embattled President Gotabaya Rajapaksa to its leader Sajith Premadasa to head an interim government, amid continued political uncertainty in the country which is now under a state of emergency.
“Our leader refused to accept the president's offer," Tissa Attanayake, the national organiser for
Samagi Jana Balawegaya (SJB) told reporters.
Rajapaksa had called over the telephone both Premadasa and Harsha de Silva, the SJB economic guru, on the prospect of forming an interim government which had been a demand endorsed by the powerful Buddhist clergy as well as the group which had broken away from the ruling Sri Lanka Podujana Peramuna (SLPP) coalition.
The SJB announced on Saturday that they would back the proposal from the lawyers' body BASL which had advocated for the setting up of an interim government for a period of 18 months with a move to abolish the presidential system of governance.