India extends US$ 1bn credit line for Sri Lanka by one year

India has extended a US$ 1 billion credit line for Sri Lanka by one year, a Reuters news report said quoting a Finance Ministry official.
India has extended a US$1 billion credit line for Sri Lanka by one year, a Sri Lankan official told Reuters yesterday, giving the crisis-hit country a backup fund to pay for 
essential imports.

Post-negotiations, the credit line was extended until March 2024, Reuters said quoting Treasury Secretary 
Priyantha Rathnayake.
“There is about US$ 350 million left of the credit line that can be utilised as needed.
However, given the increase of foreign exchange availability in the market, the need is not as keen as it was last year,” Rathnayake was 
quoted as saying.

Sri Lanka’s reserves dropped to record lows in April last year, triggering its worst financial crisis since independence from British colonial rule in 1948. 
Increased foreign inflows by way of workers’ remittances and tourism and the US$ 3 billion International Monetary Fund programme have however helped Sri Lanka rebuild the reserves since then to a certain extent. 
As at end April, Sri Lanka’s foreign reserves stood at US$ 2.75 billion, inclusive of a US$ 1.4 billion equivalence of Chinese Yuan denominated swap facility from the People’s Bank of China obtained two years ago, which has conditions on its usability.