Sri Lanka on March 3 thanked India for its efforts in helping the island nation in its recovery from economic crisis last year. Sri Lanka’s foreign minister Ali Sabry said all the other countries put together had not done what India did for his nation.
“India is the greatest partner of our recovery & stabilisation. I think all other countries put together had not done what India had done for us. US$ 3.9 billion worth of credit line had given us a lifeline to fight another day. We’re very grateful to India”, Ali Sabry said.
Ali Sabry also spoke on the current situation in Sri Lanka, saying inflation is under control and the local currency has stabilised.
“Sri Lanka has come a long way since last May-June collapse. Our inflation is under control, Rupee stabilised, queues no longer there, tourism has bounced back and Sri Lankans have started to send their funds back through normal channels”, Sabry said.
“It is the foundation for stability and along with that we are expecting IMF EFF programme to come through end of this month. So, with that I think we’re back on track for recovery”, he added.
On March 2, Colombo raised the borrowing costs for the first time in five meetings to tamp down inflation as it seeks a $2.9 billion loan from the International Monetary Fund (IMF) loan to keep its economy steady.
Sri Lanka’s central bank hiked the standing lending rate by 100 basis points to 16.5 per cent. “There have been some differences between the CBSL and IMF staff on the inflation outlook,” the central bank said in a statement, adding that the IMF was of the view that more action was needed.
India provided about $4 billion in rapid assistance between January and July, including credit lines, a currency swap arrangement and deferred import payments, and sent a warship carrying essential drugs for the island’s 22 million people.
Earlier, in January 2023, Indian External Affairs Minister Dr Jaishankar said, “We felt strongly that Sri Lanka’s creditors must take proactive steps to facilitate its recovery. India decided not to wait on others but to do what we believe is right. We extended financing assurances to the IMF to clear the way for Sri Lanka to move forward. Our expectation is that this will not only strengthen Sri Lanka’s position but ensure that all bilateral creditors are dealt with equally”.
He said, “we also know that Sri Lanka’s pathway is one of a strong economic recovery propelled by greater investments. I also have a clear message that I will be sharing with the business community. India will encourage greater investments in the Sri Lankan economy, especially in the core areas like energy, tourism and infrastructure”.
Earlier in 2022, as India extended help to Sri Lanka amidst the biggest economic crisis since its independence, former cricketer and Sri Lankan politician Arjuna Ranatunga thanked PM Modi and India for supporting Sri Lanka in every possible way in the hour of its need. Arjuna Ranatunga said India has been an elder brother to Sri Lanka.
Praising Prime Minister Narendra Modi, Ranatunga said, “PM Modi was very generous to give the grant to start Jaffna International Airport. India has been an elder brother to us… They’re looking at our needs like petrol & medicines… India has been helping us in a big way.”
He further added, “India has been like an elder brother to us. I am glad that they are monitoring rather than just giving money to Sri Lanka. They are looking at our needs like petrol and medicine. I am sure that those are the things we will lack in the next couple of months. I think that is why India might have come out and India has been helping us in a big way.”
In February 2022, Sri Lanka faced with the worst economic crisis in its history, with inflation reaching a record high of 17.5%. The residents of the island nation were struggling with an acute shortage of food, and cooking gas. Power cuts were frequent and people were seen standing in long queues in the National Capital for buying diesel fuel.