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Temporary relief to Sri Lanka from India’s financial package, need to take help from IMF: Economist

Colombo, Jan 15 (PTI) India’s financial package has saved Sri Lanka from a major economic crisis for some time. Sri Lanka’s top economist WA Vijayawardene said this on Saturday.

However, at the same time, he cautioned that the Gotabaya Rajapakse government would need to immediately seek help from the International Monetary Fund (IMF) in the wake of the foreign exchange crisis in the country.

India on Thursday announced a $900 million loan to Sri Lanka for its dwindling foreign exchange reserves and food imports, amid a shortage of almost all essential commodities in the island nation.

India’s High Commissioner to Sri Lanka Gopal Baglay called on the Governor of the Central Bank, Ajit Nivard Cabral. In his meeting with the governor, he “assured India’s support to Sri Lanka amid a loan facility of over $900 million given by the Reserve Bank last week”.

Vijayawardene said India’s timely assistance has given the Sri Lankan government a two-month respite. In the meantime a ‘bailout’ from the IMF is needed to implement tough economic reforms and a permanent solution.

“India’s intervention has helped Sri Lanka, but they cannot get us out of trouble,” he said. We need to take help from IMF while respecting the help from India.

Vijayavardhan’s remarks came after an extensive virtual meeting on Indian economic aid to Sri Lanka on Saturday by External Affairs Minister S Jaishankar and Sri Lankan Finance Minister Basil Rajapaksa.

A statement issued by the Ministry of External Affairs said that during the meeting, Jaishankar conveyed that India has always stood by Sri Lanka, and continues to support it in all possible ways to overcome the economic and other challenges arising out of the Covid-19 pandemic. Will keep

The issue of getting relief from the IMF has been a controversial one, on which the Sri Lankan cabinet is divided.

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