China leads loan commitments to Sri Lanka in 2018
Mar 15, 2019 05:32 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT- China has committed the most bilateral financing to Sri Lanka in 2018, with a billion US dollar syndicated loan for discretionary deficit financing, but other lenders are leading in project loans, official data shows.
In addition to the billion US dollar syndicated loan, which was disbursed during 2018, Sri Lanka has signed project financing worth 1.13 billion US dollars in the first 11 months of 2018.
In 2018, Sri Lanka's central bank triggered monetary instability by cutting rates with printed money just as the economy recovered, generating foreign exchange shortages and capital flight, driving the country into the brink of default.
The billion US dollar loan, which has to be repaid in 8 years, was used for untied budget financing, including loan repayments. It was below commercial rates.
The Manila-based Asian Development Bank committed to give the largest loans worth 438 million US dollars, followed by the World Bank with 104 million US dollars.
China will give 85 million US dollars for road development.
Data showed that 72.5 million US dollars were in the form of grants.
Around 24 percent of the financing is for education and training, 18 percent for environment, and 14 percent for health and social welfare.
Another 13 percent was allocated for roads and bridges. (Colombo/Mar15/2019-SB)