Struggling with the worst economic crisis in its history, Sri Lanka announced that it is considering allowing the Indian rupee to be used in local transactions.
Sri Lankan Foreign Minister Ali Sabry made a statement to the press after his visit to India with President Ranil Wickremesinghe.
Sabry said the move to allow its neighbors’ (India) currency to be used for domestic transactions will allow “tourists from India and other regions to use rupees directly in Sri Lanka without the hassle of converting multiple currencies.”
Pointing out that the trade deficit between the two countries is in favor of India, Sabry pointed out that using the Indian rupee would be an advantage for Sri Lanka.
Regarding the step of using the rupee in local transactions, Sabry said, “We need more Indian currency, so it’s good for us that more Indians come here and spend Indian money.” said.
Agreements were signed in many areas.
After the visit on 20 July, India and Sri Lanka signed agreements in many fields such as energy, trade and development.
Sri Lanka imported a large number of products, including food, pharmaceuticals, building materials, automobiles, fertilizers and chemicals, from India, one of its largest trading partners, while trade between the two countries totaled $5.45 billion in 2021.
India provided more than $4 billion in aid to Sri Lanka.
Sri Lanka received a loan of 600 million dollars from the World Bank
Facing the worst economic crisis in its history, Sri Lanka received a loan of 600 million dollars from the World Bank in 2022.It is known that Sri Lanka owes about 7 billion dollars to China and about 1 billion dollars to India.
In February, both countries agreed to restructure their loans, giving Sri Lanka more time to repay it.
In March, the IMF approved a $2.9 billion rescue package for Sri Lanka under the Extended Fund Facility (EFF).