Negotiations for new loan with China; seeks US $ 1bn Indian credit line for imports

The government has started negotiations with China for a new loan facility to cushion the upcoming debt repayments to that country. 

“At this moment, assistance has been sought, which may have been connected to debt repayments to China. We have an understanding that they would assist us in making the repayments in that form. So, maybe there is a possibility that we would have a new loan coming, in order to cushion our debt repayments to China itself,” Central Bank Governor Ajith Nivard Cabraal said.

He added that the negotiations are at an advanced stage,

although the loan figure is yet to be determined. During the recent visit of Chinese Foreign Minister Wang Yi, President Gotabaya Rajapaksa sought debt relief and a concessional trade credit scheme to finance the imports from China. China and India remain as Sri Lanka’s largest importers. Cabraal also said Sri Lanka is in negotiations with India to secure a US $ 1 billion credit facility from India for imports.