Lanka settles part of India’s credit line with first tranche of IMF assistance

COLOMBO: Sri Lanka has settled part of India’s credit line from the first tranche of the IMF bailout programme it received a couple of days ago, state minister of finance Ranjith Siyambalapitiya said on Friday.

Sri Lanka on Wednesday received USD 330 million as the first tranche of the International Monetary Fund (IMF) bailout programme, which will pave the way for the debt-ridden country to achieve better “fiscal discipline” and “improved governance,” according to President

Ranil Wickremesinghe.

“We have settled USD 121 million as part of India’s credit line using the first tranche of IMF’s bailout programme,” Siyambalapitiya told reporters.

Earlier this week, the IMF approved a USD 3 billion bailout programme to help Sri Lanka overcome its economic crisis and catalyse financial support from other development partners, a move welcomed by Colombo as a “historic milestone” in the critical period.

Sri Lanka has been hit hard by a catastrophic economic and humanitarian crisis, sparked by years of mismanagement and the raging pandemic.

“Debt sustainability was our biggest issue. So we have decided to pay the first instalment of the Indian credit line, which came to our assistance during the crisis,” Siyambalapitiya explained.

India has extended multi-pronged assistance to Sri

Lanka during the peak of its economic and humanitarian crisis in line with its “Neighbourhood First” policy and as an earnest friend and partner of Sri Lanka.

India has extended lines of credit worth over USD 4 billion to Sri Lanka in diverse sectors including the supply of essential items, petroleum, fertilisers, development of railways, infrastructure, defence sector and renewable energy, according to the Indian High Commission here. The Indian credit lines since January 2022 have provided a lifeline to debt-stricken Sri Lanka.

Earlier this week, the IMF approved a $3 billion bailout programme to help Sri Lanka overcome its economic crisis