“India decides to end financial aid to Sri Lanka” – Reuters
Reuters, citing two sources, reports that India does not plan to provide new financial aid to Sri Lanka in addition to the nearly four billion US dollars provided this year.
The report states that India has taken this decision as Sri Lanka’s economy stabilised after entering into an initial loan agreement with the International Monetary Fund.
According to the Reuters report, although India has become the country that provided the most aid this year to Sri Lanka, which is fighting against the worst economic crisis faced in more than 07 decades, the situation is now better than it was in May and July.
“We have already provided assistance worth US$ 3.8 billion. Now it’s all on the International Monetary Fund. “Countries cannot continue giving aid,” an Indian government source told Reuters.
A Sri Lankan government source said that India’s decision was not a surprise and that New Delhi had “signalled” a few months ago that large-scale aid would not be available for a little while.
However, the source said that India would be invited to the donor summit that Sri Lanka is planning to host later this year, along with Japan, China and possibly South Korea.
Another Sri Lankan government source said talks between India and Sri Lanka on a $1 billion swap deal and a request for a second $500 million line of credit for fuel purchases made in May had made little progress.
Reuters reported that the Finance Ministry of India, the Ministry of Finance of Sri Lanka and the Central Bank of Sri Lanka did not immediately respond to requests for comment.
Sri Lanka and the International Monetary Fund reached a preliminary agreement in early September for a $2.9 billion loan, which is contingent on receiving financial guarantees from official creditors and negotiations with private creditors.
“Our focus is more on continuing the International Monetary Fund’s programme and getting out of this mess ourselves,” said a source in Sri Lanka, Reuters news agency further reported.
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