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Wednesday October 5th, 2022

Sri Lanka in talks for milk credit line from New Zealand

ECONOMYNEXT – Sri Lanka is in talks for a credit line for dairy products from New Zealand, Treasury Secretary Sajith Attygalle said as the country faced forex shortages and struggled to maintain an unblemished record on foreign debt repayments.

The credit lines will be facilitated at government to government level but the importing and exporting firms will enter into the contracts, he said.

Sri Lanka spends about 300 million dollars a year on diary product imports, he said.

Sri Lanka is also seeking 500 million US dollar credit line from India for oil imports, President’s Secretary P B Jayasundera has said.

Foreign borrowings for domestic consumption or investment tend to expand foreign debt and widen the external current account deficit.

Sri Lanka generally expands foreign borrowing including through credit lines, after liquidity injections by the central bank triggers forex shortages. (Colombo/Sept26/2021)

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