Sri Lanka's FM GL Peiris on 3-day visit to India from today to expand bilateral ties

Sri Lanka’s Foreign Minister G.L. Peiris is scheduled to visit New Delhi on a three-day visit from February 6 to 8, according to ANI. Peiris is expected to meet with India’s Foreign Minister S Jaishankar, strengthen bilateral ties, and boost cooperation in areas of trade and relations. Sri Lanka’s foreign minister visit comes just days after India approved a $400 million currency swap and deferred another $500 million for settlement to the Asian Clearing Union (ACU) to help the island nation deal with the unprecedented economic crisis during the COVID-19 pandemic.

The two countries had also reviewed progress in extending loans worth a total of $1.5 billion to help Sri Lanka make emergency purchases of food, medicines, and fuel as its economy reeled under a crisis. 

Jaishankar met Sri Lankan counterpart Peiris in New York, last year

India’s Foreign Minister S Jaishankar had met with his Sri Lankan counterpart Peiris in New York in September last year on the sidelines of the 76th United Nations General Assembly (UNGA). The two held a comprehensive discussion on close partnership and to advance the two nations’ shared agenda.

External affairs minister S Jaishankar and Sri Lankan finance minister Basil Rajapaksa also held a virtual meeting on January 15 to discuss a four-point financial assistance package to help Sri Lanka tackle severe debt and foreign exchange crisis amid the coronavirus pandemic. India pledged its continuous support to Sri Lanka and provide emergency financial assistance. India also delivered 100,000 Rapid Antigen Self Test Kits to Sri Lanka to help it in the fight against COVID-19. 

Sri Lanka has been facing a rising financial and humanitarian crisis that has pushed the country to the brink of bankruptcy in 2022 as inflation reached new highs. The Sri Lankan government declared a national financial emergency last year, following a sharp drop in the value of the country's currency, which resulted in rising food costs, according to Colombo Gazette. Sri Lanka has been dealing with twin deficits, namely fiscal and trade deficits, for the better part of the last decade. Island country's foreign debt has been increasing since 2014, reaching 42.6% of GDP in 2019. Its total foreign debt was anticipated to be USD 33 billion in 2019, putting a severe load on the debt servicing. Various credit rating agencies, including Standard & Poor's, Moody's, and Fitch, reduced Sri Lanka's credit rating from C to B, making it difficult for the country to borrow financing through International Sovereign Bonds (ISBs).