iPhone | iPad
Android
Huawei
The development comes days after its last test and ahead of US Vice President Kamala Harris' visit to South Korea
KT APPDOWNLOAD
China mulls package to ease Sri Lanka's economic crisis
Sri Lanka needs to make nearly $7 billion in payments on foreign loans this year
People stand in a queue to buy kerosene oil for home use at a petrol station in Colombo on March 21, 2022. Photo: AFP
China's ambassador to Sri Lanka said Monday it is considering a request for $2.5 billion in assistance to help the island nation through a debt and foreign currency crisis.
Qi Zhenhong told reporters that Beijing is studying the Sri Lankan government's appeal for a $1 billion loan and $1.5 billion credit line.
Sri Lanka needs to make nearly $7 billion in payments on foreign loans this year, but Qi was non-committal about a request to restructure China's loans to Sri Lanka.
"Our ultimate goal is to solve the problem, but there may be different ways to do so," he said.
Sri Lanka's foreign reserves are dwindling at a time when it faces huge debt obligations. The country's struggle to pay for imports has caused shortages of medicine, fuel, milk powder, cooking gas and other essentials, with people waiting in long queues to get fuel.
Residents are enduring daily power cuts due to a shortage of fuel to operate the generating plants and dry weather has sapped hydropower capacity.
The Central Bank allowed the local currency to free float earlier this month, causing a sharp increase in prices.
Sri Lanka's economy depends heavily on tourism and trade and the pandemic has been disastrous, with the government estimating a loss of $14 billion over the last two years. The economy is estimated to have contracted by 1.5 % in July- September 2021, according to the central bank.
Sri Lanka's foreign reserves are shrinking partly because of construction projects built with Chinese loans that are not making money. China loaned the country money to build a seaport and airport in the southern Hambantota district and a wide network of roads.
Central Bank figures show that current Chinese loans to Sri Lanka total around $3.38 billion, not including loans to state-owned businesses, which are accounted for separately and thought to be substantial.
ALSO READ:
Qi said that since the outbreak of Covid-19 in 2020, China has provided $2.8b in financial help to Sri Lanka.
"Our aim is to help Sri Lanka to overcome the current difficulties," he said.
Last week, neighboring India extended a $1 billion credit line to Sri Lanka to be used for importing food, medicines and other essentials from India.
The two Asian giants are vying for influence in the Indian Ocean and consider Sri Lanka strategically important.
More news from Asia
Around 300 houses in the coastal province of Quang Tri had their roofs blown off late on Tuesday as the wind began picking up speed
The veteran had been skiing and exploring the Manaslu, when she slipped and fell off the other side of the peak
Announced funding will be channelled through new and existing projects in sectors such as farm inputs, social protection and irrigation
Group raising funds as part of a 'criminal conspiracy', transferring it through multiple accounts to show them as legitimate: Government notice
Around 90 people were onboard the ferry at the time, of whom 50 were on their way to a centuries-old temple for a major festival
On Sunday, several recordings of the leaders of the ruling government surfaced on social media
Japan has imposed tight security measures in the capital city Tokyo as over 20 heads of state and heads of government will be in attendance