India lends a helping hand to Sri Lanka

Colombo : In an unstinted and multi-faceted support to Sri Lanka which is grappling with its worst-ever economic crisis, India has extended the duration of the $400 million currency swap facility which had been concluded with the island nation in January.

This was the first extension of an international debt instrument to Sri Lanka after the government led by President Gotabaya Rajapaksa on April 12 temporarily suspended debt servicing. The embattled government had announced an orderly default until the country came to an agreement with the International Monetary Fund (IMF) for a possible bailout package.

India’s unstinted and multi-faceted support to Sri Lanka continued. As ongoing currency support, @RBI extended the duration of the US$ 400 million currency swap for @CBSL which was concluded in #January this year, the High Commission of India said on Twitter.

Meanwhile, Sri Lanka will receive $300 million to $600 million from the World Bank over the next four months to buy medicine and other essential items.

As Sri Lanka faces one of the worst economic crises, China has been widely criticized for pushing the Sri Lankan economy into its ‘debt trap’ and for predatory behaviour such as leasing out the port of Hambantota for 99 years.

Amidst the dire economic crisis, India’s multi-billion-dollar support to Sri Lanka has raised questions over the complaints regarding the lack of transparency in major agreements with the Indian government or private entities, reported E-International Relations, the world’s leading international relations website.

Similarly, Sri Lanka has also criticized two maritime security pacts signed with India in March which pose as threats to Sri Lanka’s national security and sovereignty. China’s control over the port in Hambantota has even raised concerns in Sri Lanka.

Crisis-hit Sri Lanka’s inflation hit a record high for the sixth consecutive month, official data showed on Friday as the government asked the IMF for an urgent bailout.

The broad-based National Consumer Price Index (NCPI) rose 21.5 percent year-on-year in March, more than four times the 5.1 percent inflation of a year earlier.

Food inflation in March stood at 29.5 percent, according to the latest data from the Department of Census and Statistics.