Sri Lanka to get $1b China loan

- Reuters, COLOMBO

Jan 18, 2019-

Sri Lanka will receive a loan of $1 billion from Bank of China before the end of the January-March quarter, the chief of the central bank said on Thursday, to help the country meet repayments in the coming months.

Sri Lanka is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months.

The island nation is a key battleground in the tussle for influence in South Asia between China and traditional regional power India.

 “We will get the $300 million before end of this month and upsize it to $1 billion. The whole loan will be taken in the first quarter,” Indrajit Coomaraswamy told Reuters.

Coomaraswamy said the interest rate for the $300 million loan is around 5.5 percent.

 “This is a sovereign loan and does not require any collateral.” Officials from Bank of China were not available for immediate comment.

Coomaraswamy said the 5.5 percent interest rate is attractive compared to the country’s sovereign bonds in the market. A series of credit rating downgrades amid a political crisis have made it harder for Sri Lanka to tap international capital markets.

Published: 18-01-2019 09:33

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