World News | Sri Lanka Settles Part of India's Credit Line with First Tranche of IMF Bailout Package

Colombo, Mar 24 (PTI) 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.

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"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.

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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, amid the growing public dissent over the worsening economic conditions.

Sri Lanka was hit by an unprecedented financial crisis in 2022 that also sparked political turmoil in the island nation leading to the ouster of the all-powerful Rajapaksa family.

Last year, Sri Lankan declared a debt default on over USD 51 billion in foreign loans – a first in the country's history.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)