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Friday October 7th, 2022

Nothing unusual about China’s 800mn yuan grant to Sri Lanka: minister

ECONOMYNEXT – There is nothing out of the ordinary about the recent 800 million yuan grant offered to Sri Lanka, and China’s friendly gesture, made in the island nation’s hour of need, was no different to the assistance extended by India, a Sri Lankan cabinet minister said.

Co-cabinet spokesman Minister Ramesh Pathirana told reporters on Tuesday (11) that there was “nothing special” about China’s offer.

Sri Lanka is set to receive a grant of 800 million yuan (about 125millon US dollars’ equivalent) as part of agreements signed following a visit by China’s Foreign Minister Wang Yi.

Related: Sri Lanka to get US$125mn equivalent grant from China on Wang Yi visit

“We are friends of all countries and enemies of none,” said Pathirana, noting that Sri Lanka has plenty of friendly countries willing to help in times of need. The minister cited a recent 1-billion-US-dollar loan agreement made with the Exim bank of India and a 1.5-billion-US-dollar currency swap with China as examples.

The Chinese grant comes as part of a bilateral agreement between China and Sri Lanka, and the money can be used for food, medicine and/or infrastructure, according to the government.

The island nation is currently going through one of the worst economic crises in its history, exacerbated by a crippling shortage in US dollars.

Noting that India, China and Japan have historically helped Sri Lanka in times of need, Pathirana said the government is looking at available options.

“Debt restructuring is possible, so we need to talk to the agencies and countries and debt owners. At the same time, we are talking to the World Bank and the Asian Development Bank. We have kept our doors open to talk to the IMF also,” he said.

The government is reportedly divided sharply on the matter of opting for an IMF bailout.

Pathirana’s remarks on Tuesday highlight the severe economic crisis the country is going through, with rising prices, depleting foreign reserves, and shortages in every sector, along with the possibility of power outages adding to the public’s woes.

More information on Sri Lanka’s efforts to survive the crisis will be revealed at a press briefing scheduled for Wednesday by Central Bank Governor Ajith Nivard Cabraal, said Pathirana. (Colombo/Jan11/2022)

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