Sri Lanka may get new loan to make repayments to China: CB Governor

ECONOMYNEXT – Sri Lanka may negotiate a new loan which can be used to make loan repayments to due to China after President Gotabaya Rajapaksa asked visiting foreign minister for debt assistance, Central Bank Governor Nivard Cabraal said.

“We have an understanding that they would assist us in making the repayments in that form,” Governor Cabraal told reporters.

“So maybe there is a possibility that we would have a new loan coming in order to cushion our debt repayments to China itself.

“May be we will that that in the future as well. It is to cushion the debt repayment to China and we would try to negotiate a new loan for that purpose as well as for any other purposes as well.”

China has given budget support loans to Sri Lanka several years running which has more than covered annual repayments.

Annual repayments in the past years have ranged around 300 to 400 million US dollars but China has given between 500 to 800 million in budget support loans.

Multilateral agencies have generally halted giving budget support loans due to the reluctance of successive administration to engage in growth generating reforms and lately due the lack of a Debt Sustainability Assessment sign off from the International Monetary Fund.

Leave a Reply

#Tags; lanka c news, jvp news, hiru news, gossip lanka news, sri lanka news