Reserve Bank of India (RBI) has agreed to a USD 400 million currency swap facility for Sri Lanka, valid till November 2022. This will help Sri Lanka to meet its short-term international liquidity requirements and to boost its foreign exchange reserves following the economic crisis resulting from COVID-19.This Currency swap agreement was made under the South Asian Association for Regional Cooperation (SAARC) framework.
Technical discussion
i.Recently, India and Sri Lanka held a “technical discussion” on the rescheduling of the bilateral debt repayment through video conference.
ii.Key People: From India, senior officials from the Ministry of External Affairs, Ministry of Finance, and the EXIM Bank interacted with representatives from the Department of External Resources of Sri Lanka.
iii.The next round of technical discussions between the two sides on the rescheduling of debt repayment is expected to be held soon.
Note: Sri Lanka owes USD 960 million to India.
Webinar on ‘Deepening Economic Collaboration between India and Sri Lanka’
i.The government and industry representatives from India and Sri Lanka participated in a webinar on ‘Deepening Economic Collaboration between India and Sri Lanka’.
ii.The webinar is organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKIIRSS)
Key People- Secretary, Ministry of Foreign Affairs, Ambassador Ravinatha Aryasinha and the President of FICCI, Dr. Sangita Reddy and representatives from the Sri Lankan Board of Investment, Tourism Promotion Board, and the Institute of Nanotechnology among others participated in the webinar.
Relationship between India and Sri Lanka
i.India is among the top 5 foreign investors in Sri Lanka, and accounts for 20 % of total Sri Lankan imports. India is the 3rd largest export destination for Sri Lanka
ii.Sri Lanka is one of India’s largest trading partners in SAARC. With India-Sri Lanka Free Trade Agreement in March 2000 in force the trade grew between two countries.
iii.Sri Lanka is among the major recipients of development assistance from the Government of India.
iv.India’s overall commitment to Sri Lanka is about USD 3 billion, out of which around USD 560 million are in grants.
Recent Related News:
i.India and Denmark signed an MOU for developing cooperation in the power sector.
ii.India and Maldives inks 5 MoUs to establish Addu tourism Zone on 5 islands of Addu Atoll in Maldives with a project cost of $2.49 million. In addition, a 6th MoU to set up a bottled water plant at Hoarafushi, an inhabited island in Maldives was also signed.
About Sri Lanka
Capital – Colombo, Sri Jayawardenepura Kotte
Currency– Sri Lankan Rupee
President– Gotabaya Rajapaksa
Prime Minister– Mahinda Rajapaksa