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India extends USD 900 mn facilities as Sri Lanka struggles to repay loans

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As Sri Lanka is struggling to repay a US$ 500 million international sovereign bond (ISB) by the 18 January deadline whilst running short of reserves to purchase essential needs of the country, the Reserve Bank of India (RBI) will extend over US$ 900 million facilities to Sri Lanka, comprising Asian Clearing Union (ACU) settlement of over USD 500 million and currency Swap of USD 400 million.

Indian High Commissioner to Sri Lanka Gopal Baglay yesterday communicated this message to Sri Lanka’s Central Bank Governor Ajith Nivard Cabraal when the duo met at the latter’s office, according to the official Twitter handle of the CBSL Governor.

The Indian High Commissioner noted during the meeting that the steps were in line with India’s strong commitment to standing with Sri Lanka for its economic recovery and growth.

Governor of the Central Bank Ajith Nivard Cabraal tweeted yesterday that he had had a fruitful discussion with the Indian High Commissioner where he had confirmed a SAARC Swap by the Reserve Bank of India (RBI) and other forms of bilateral cooperation.

“Sri Lanka is at a decisive moment in raising overseas funds without going to the IMF so this signifies a positive development in mobilising funds from Sri Lanka’s friendly countries to tide over its current reserves crisis,” an analyst told The Island.

On 11 January, Vice President of ADB Shixin Chen met with the CBSL Governor where they had discussed ADB’s future programme in Sri Lanka, their Country Assistance Strategy and the upcoming ADB AGM to be held in Colombo in May 2022.

Asian Clearing Union (ACU) is a payment arrangement whereby the participants settle payments for intra-regional transactions among the participating central banks. A Swap is a contract through which two parties exchange the cash flows from two different financial instruments.



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Food Policy and Security Committee recommends importation of rice to ensure an uninterrupted supply

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The Food Policy and Security Committee has recommended the importation of rice in the near future to ensure an uninterrupted supply for consumers.

A notable increase in rice prices has been observed in the market, along with reports of shortages of certain rice varieties, despite the current harvest season.

Given this situation, discussions were held regarding the need for the Cabinet to prioritize the maintenance of sufficient stock,  through rice imports.

The Committee, chaired by Minister of Agriculture, Livestock, Lands and Irrigation K.D. Lalkantha and Minister of Trade, Commerce, Food Security and Cooperative Development Vasantha Samarasinghe, convened for the fifth time at the Presidential Secretariat on Tuesday (01). The meeting aimed to formulate policy decisions to ensure food security.

During the discussions, it was revealed that due to excessive rainfall this year, crop damage occurred on two occasions, leading to a significant reduction in the expected harvest.

Furthermore, during the meeting it was stated that the improper use of rice for animal feed is another major reason contributing to the rice shortage. As a result, the Committee also focused on the importation of broken rice for animal feed and the use of alternative feeds to mitigate the impact on livestock production.

Accordingly, the Food Policy and Security Committee approved the formation of a Committee, led by the Director General of Agriculture, to oversee the importation of the required quantity of broken rice through proper mechanisms.

Secretary to the Prime Minister Pradeep Saputhanthri, Senior Additional Secretary to the President Kapila Janaka Bandara, and other members of the Food Policy and Security Committee, including Ministry Secretaries, participated in the discussions.

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Cabinet approves providing relief to the people of Myanmar

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The People of Myanmar are facing  immense hardships caused by the devastating earthquake  on 28th March  and as reported by the international media reports the death toll is over 2,700. Furthermore, it has been reported that many people are missing while, a large number of individuals have been injured and are receiving treatment.

Considering the long – term close relationship between the two nations as two Buddhist states, the Cabinet of Ministers has decided to provide,

• A sum of United States Dollars One Million

•  Transportation for the dry rations collected by Buddhist clergy and other donors

• To have a group  of medical officers and health staff on standby for immediate departure to Myanmar if necessary

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Cabinet appoints ministerial committee to submit report on sanctions imposed on 04 Sri Lankans by the United Kingdom

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Attention of the Cabinet of Ministers have been drawn on the decisions taken by the United Kingdom to impose sanctions on four Sri Lankan individuals recently, and have decided to appoint a committee comprised of three ministers  to submit a report with recommendations on the further measures to be taken after studying the facts in the regard and to empower the committee to obtain the service of any officer/intellect deemed to have subject expertise in the relevant field and considered essential.

The committee will comprise of :

– Vijitha Herath Minister of Foreign Affairs, Foreign Employment and Tourism

– Attorney – at – Law  Harshana Nanayakkara Minister of Justice and National Integrity

– Aruna Jayasekara Deputy Minister of Defence

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