Sri Lanka expedites seeking US$2.5 bln loan from China

Sri Lanka is to receive a US$ 2.5 billion loan facility soon from China with concessionary terms and conditions and the arrangements relating to expedite the granting of this loan are now underway, Finance Ministry sources revealed.

China is making arrangements to grant the loan and buyers credit of $1 billion and $1.5 billion respectively to Sri Lanka, they said.

It will be useful as the country has to repay foreign debt amid a forex crisis and out of this loan $1 billion will be used to repay a previous Chinese swap due in July this year, it added. 

According to the Finance Ministry, a buyer’s credit is usually a loan given by Exim Bank of China to purchase goods and services and has also been used to finance infrastructure in the island in the past.

President Gotabaya Rajapaksa last year requested debt re-structuring from China as the country was downgraded by credit ratings agencies and foreign reserves dwindled amidst heavy money printing. (Bandula)