Skip to content 
Search

Latest Stories

Sri Lanka seeks £1.6 billion from China as reserves shrink

Sri Lanka seeks £1.6 billion from China as reserves shrink

Sri Lanka is seeking $2.2 billion (£1.6 billion) from Chinese banks, the government said on Thursday, in echoes of a borrowing binge more than a decade ago that resulted in the country having to give up a strategic port to China.

Money and capital markets minister Nivard Cabraal said the government was hopeful of finalising a $1.5-billion (£1.1 billion) swap facility with China's central bank.


"Within the next two weeks we should be able to finalise it," Cabraal told reporters in Colombo while maintaining that the funds would be used as a "buffer" to meet the government's foreign currency needs.

Official figures show Sri Lanka's foreign reserves plummeted to $4.8 billion (£3.4 billion) at the end of January, the lowest since September 2009 when they fell to $4.2 billion (£2.9 billion).

Officials said Sri Lanka was also in talks with China Development Bank for a $700-million (£496 million) loan that would include the equivalent of $200 million (£142 million) being drawn in Chinese currency.

Under former president Mahinda Rajapaksa between 2005-15, Colombo borrowed billions from China, accumulating a mountain of debt for expensive infrastructure projects.

This sparked Western and Indian concerns that the strategically located Indian Ocean nation was falling victim to a Chinese debt trap.

Mahinda Rajapaksa returned to power as prime minister in 2019 after his brother Gotabaya Rajapaksa as elected president.

Sri Lanka was forced to hand over its strategic Hambantota port on a 99-year lease to a Chinese company in 2017 after Colombo said it was unable to service the $1.4-billion (£1 billion) debt from Beijing used to build it.

Three top international rating agencies downgraded Sri Lanka's creditworthiness late last year after raising doubts over Colombo's ability to service its foreign debt.

The South Asian nation's economy is reeling from the twin impacts of the deadly 2019 Easter bombings that killed 279 and devastated the tourism sector as well as the fallout from the pandemic.

Cabraal insisted Thursday that Sri Lanka would maintain its record of repaying debt on time and said the credit downgrades by international agencies were "unwarranted."

He said Sri Lanka had already repaid $500 million (£354 million) this year out of its $3.7 billion debt servicing commitment for calendar 2021.

He said the government imposed a ban on luxury imports and several other commodities in a bid to conserve foreign exchange so that the country could have sufficient foreign currency to repay its debt.

Sri Lanka's economy contracted by a record 3.9 percent last year.

However, Cabraal said economic activity was picking up and the country estimated foreign inflows of $32 billion (£22.6 billion) against outflows of $27.6 billion (£19.6 billion) this year leaving a surplus of $4.4 billion (£3.1 billion).

More For You

Brothers deny assaulting police during Manchester Airport brawl

Photo for representation. (iStock)

Brothers deny assaulting police during Manchester Airport brawl

TWO brothers accused of assaulting a man inside a Starbucks and later attacking police officers at Manchester Airport are standing trial, with the prosecution arguing they used "unlawful and extreme violence".

Mohammed Fahir Amaaz, 20, and his older brother Muhammad Amaad, 26, both from Rochdale, are said to have acted aggressively on July 23 last year while at the airport to pick up their mother, who had arrived on a flight from Qatar.

Keep ReadingShow less
Court to review teen's sentence in Bhim Kohli case
Bhim Kohli

Court to review teen's sentence in Bhim Kohli case

THE seven-year prison sentence handed to a 15-year-old boy convicted of the manslaughter of 80-year-old Bhim Sen Kohli is to be reviewed under the UK’s Unduly Lenient Sentence (ULS) scheme.

The Attorney General’s Office confirmed on Friday (5) that the teenager’s sentence will now be considered by the Court of Appeal.

Keep ReadingShow less
Dalai Lama hopes to live 'beyond 130 years'

Tibetan spiritual leader the Dalai Lama attends a prayer meet held for his long life at the Dalai Lama temple in the northern hill town of Dharamshala, India, July 5, 2025. REUTERS/Anushree Fadnavis

Dalai Lama hopes to live 'beyond 130 years'

THE Dalai Lama said on Saturday (5) he hopes to live until he is more than 130 years old, two decades longer than his previous prediction, following his assurance to followers that he would reincarnate as the spiritual head of the faith upon his death.

The Nobel Peace Prize winner was speaking during a ceremony organised by his followers to offer prayers for his long life, ahead of his 90th birthday on Sunday (6), and as China insists it will choose his successor. The Dalai Lama told Reuters in December he might live to 110.

Keep ReadingShow less
UK heatwave by mid-July

Daytime temperatures meeting or exceeding set thresholds of 25°C

iStock

Met Office warns of potential third UK heatwave by mid-July

Key points

  • Met Office forecasts rising temperatures by mid-July
  • Possible third heatwave after record-breaking June
  • High pressure system likely to bring hot air from the Atlantic
  • Yellow rain warning and flood alerts issued in parts of Scotland and Cumbria

Possible heatwave to return by mid-July

The UK could experience its third heatwave in a month by mid-July, the Met Office has said. Forecasters expect rising heat and humidity during the second weekend of July, following two weekends of unusually warm weather in late June.

June was officially the hottest on record in England, and the return of high temperatures could mean another heatwave for parts of the country. However, the Met Office cautioned that it is too early to confirm how hot conditions will get.

Keep ReadingShow less
crypto

Two men have been jailed for defrauding investors of £1.5 million through a fake crypto investment scheme. (Representational image: iStock)

iStock

Two jailed over £1.5m crypto investment scam

TWO people who duped investors of £1.5 million by selling fake investments in crypto have been jailed for 12 years, the Financial Conduct Authority (FCA) said.

Raymondip Bedi, of Bromley, and Patrick Mavanga, of Peckham, conned at least 65 people by cold-calling them between February 2017 and June 2019. They operated companies including CCX Capital and Astaria Group LLP.

Keep ReadingShow less