RFI

Sri Lanka wants to borrow $ 2.2 billion from China

In Sri Lanka, the government is preparing to borrow $ 2.2 billion from Chinese banks. Colombo’s foreign exchange reserves are at their lowest level for more than a decade, raising the possibility of a default in the country. Secretary of the Capital Markets State of the Névard Cabral said the Sri Lankan government was on the verge of finalizing a deal with the Central Bank of China. The agreement provides for a loan of $ 1.5 billion. Sri Lanka is also said to be in talks with the China Development Bank for a $ 700 million loan, which officials say is intended to replenish the country’s foreign exchange reserves, in more than a decade. When the current prime minister, Mahinda Rajapaksa, was president between 2005 and 2015, Colombo borrowed billions of dollars from China for costly infrastructure projects. In December 2017, the country had to abandon a deepwater port to a Chinese company as it was unable to repay the loan for its construction, but this debt worries the West and India. He fears that the strategically located Indian Ocean island will eventually get stuck with China given the scale of the contracted debt.