Sri Lanka economy has 'completely collapsed': PM Wickremesinghe
Sri Lankan Prime Minister Ranil Wickremesinghe.

Colombo: Sri Lankan Prime Minister Ranil Wickremesinghe on Friday expressed appreciation for the support India has been extending to his country during “this difficult period”.

Wickremesinghe also said he is “grateful” for the positive response from India and Japan on the proposal made for the Quad members to take the lead in setting up a foreign aid consortium to assist the crisis-hit island nation.

Taking to Twitter, the prime minister said he had a conversation with India’s finance minister Nirmala Sitharaman on Friday.

“I expressed our country’s appreciation for the support India has extended during this difficult period. I look forward to further strengthening ties between our nations,” he wrote.

In another tweet, Wickremesinghe said he is “grateful” for the positive response from India and Japan on the proposal made for the Quad members to take the lead in setting up a foreign aid consortium to assist Sri Lanka.

India and Japan have agreed to work together on assisting crisis-hit Sri Lanka, the Japanese government had said, following a recent meeting between Prime Minister Narendra Modi and his Japanese counterpart Fumio Kishida held on the sidelines of the Quad summit in Tokyo.

Japan’s Ministry of Foreign Affairs said the two leaders had discussed the situation in Sri Lanka and had confirmed that they will cooperate with each other in light of the current economic crisis and deterioration of the humanitarian situation in the country , newswire.lk reported.

Japan’s announcement of collaborating with India to help Sri Lanka comes after Wickremesinghe earlier this month met with the ambassadors of the Quad nations — India, Japan, the US and China — and discussed the formation of an international forum for financial assistance to the debt-ridden island nation engulfed in the worst economic crisis since its independence in 1948.

Meanwhile, Sri Lanka is in talks with India for a billion US dollar swap, and another 1.5 billion US dollars are expected from deferred payments under the Asian Clearing Union, Central Bank Governor Nandalal Weerasinghe was quoted as saying by a media report.

India has already deferred about 1.5 billion US dollars from payments due under the Asian Clearing Union to India on imports. Sri Lanka importers pay about USD 500 million every two months to the central bank to be remitted to India.

They have agreed to defer that, the EconomyNext website quoted the apex bank Governor as telling Parliament’s committee on public enterprises.

India has extended about $ 3.5 billion in assistance since January this year, by way of loan deferments and credit lines for essential imports.

India has committed more than USD 3 billion to debt-ridden Sri Lanka in loans, credit lines and credit swaps since January this year.

India’s economic assistance package since January had kept Sri Lanka afloat in its worst economic crisis since independence. New Delhi provided credit lines for the purchase of fuel and essentials as Sri Lanka’s foreign reserves depleted.

Earlier on Friday, India handed over 25 tonnes of medical supplies worth over USD 700,000 to Sri Lanka as part of its ongoing efforts to help the island nation combat its worst economic crisis and shortage of medicines.

The humanitarian supplies also include kerosene for use by Sri Lankan fishermen, the Indian High Commission tweeted, adding that these supplies will be distributed among the beneficiaries in the coming days.

Last month, India extended an additional USD 500 million credit line to help Sri Lanka import fuel as the country has been struggling to pay for imports after its foreign exchange reserves plummeted sharply in recent times, causing a devaluation of its currency and spiralling inflation.

Last week, India had sent urgent relief supplies comprising 9,000 metric tonnes (MT) of rice, 200 MT milk powder and 24 MT life-saving medicines with a combined value of Rs 45 crore to Sri Lanka.

Sri Lanka is going through the worst economic crisis since independence in 1948. A crippling shortage of foreign reserves has led to long queues for fuel, cooking gas and other essentials while power cuts and soaring food prices heaped misery on the people.

The economic crisis has also triggered a political crisis in Sri Lanka and a demand for the resignation of the powerful Rajapaksas.

India has said that as an eternal and reliable friend of Sri Lanka, New Delhi is fully supportive of the island nation’s democracy, stability and economic recovery.

In keeping with India’s Neighbourhood First policy, New Delhi has extended this year alone support worth over USD 3.5 billion to the people of Sri Lanka for helping them overcome their current difficulties, the Ministry of External Affairs said on May 10.

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