Export-Import Bank of India has extended a line of credit of $500 million to Sri Lanka for financing the purchase of petroleum products, it announced on Thursday.
In accordance with the statement from the Indian High Commission in Colombo, New Delhi’s asset for fuel imports by Sri Lanka from India via the Line of Credit is in riposte to Colombo’s “urgent requirement”.
Additionally, at a time when the island nation faces an outstanding economic crisis, $900 million was allocated and the credit for fuel imports now, both governments are in talks for another $ 1 billion assistance that Colombo has sought from New Delhi.
Exim Bank, to date, has expanded 10 lines of credit to the Sri Lankan government on behalf of the Indian government, abiding the total value of LOCs inflated to $2.18 billion, a release confirmed by the signing of the LOC deal for $500 million.
To assist the island nation to manage its dollar crunch on January 13, India unfurled a $400 million currency trade to Sri Lanka, while also shelving another $500 million due for compensation to the Asian Clearing Union (ACU).
“This critical support comes in the wake of a virtual meeting between the External Affairs Minister of India S. Jaishankar and Sri Lanka’s Minister of Finance Basil Rajapaksa, held on January 15,” said the official statement released on Wednesday. After the meeting, India made the announcement verifying the emergency loan.
Exim Bank was established by the Government of India, under the Export-Import Bank of India Act, 1981 as a purveyor of export credit, mirroring global Export Credit Agencies.