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.”
Sri Lanka President seeks debt relief, import credit from China
President Rajapaksa also asked for an import credit line from China.
Governor Cabraal said China was a top source of imports to the country. A credit line had also been asked from India which was also a key import partner.
China has given budget support loans to Sri Lanka several years running which has more than covered annual repayments.
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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.
Yes keep on getting Loans on top of Loans to settle them until the noose is real tight around the neck!!
Borrowing from Peter at a higher interest rate to pay Paul. It is like a Ponzi scheme.
I cannot understand the logic of our people!! This is purile and the voters are MORE stupid!!
Mr. CB Govener please restructure the economy of Sri lanka to be independent of foreign loans. rather than converting the Sri lankan economy into a Ponzi scheme. Then Sri lankans will glorify you as the true saviour of Sri _Lanka.
Stand upto the challenge Mr. Governer !!!!!!!
Lol this guy needs to conduct economy lessons for the world !! Amazing logic