India and Sri Lanka are engaged in constructive discussions on the possible rescheduling of Colombo’s repayment to New Delhi’s help through a currency swap arrangement to overcome its financial woes, according to the Indian High Commission here.

Amidst the economic woes triggered by the coronavirus pandemic, Sri Lanka has opted to seek help from India through currency swap arrangements.

On May 23, President Gotabaya Rajapaksa spoke to Prime Minister Narendra Modi over the phone and urged India to provide a special USD 1.1 billion currency swap facility to boost the country’s draining foreign exchange reserves in view of the economic slowdown due to the coronavirus pandemic.

Sri Lanka had already secured a USD 400 million swap from India through the SAARC arrangement.

“…India-Sri Lanka discussions in the context of the situation concerning Sri Lankan economy’s external sector, the two countries have been engaged in close and constructive discussions on rescheduling Sri Lanka’s repayment to India, and on currency swap under bilateral and SAARC arrangements,” a spokesperson of the Indian High Commission was quoted as saying by the Colombo Gazette.

It said the matter had been taken up at the leadership level and has been followed up by senior functionaries bilaterally.

“Most recently, the High Commissioner of India to Sri Lanka held discussions at senior levels in Colombo on progressing the ongoing official discussions regarding Sri Lanka’s requirements,” the statement said.

Sri Lanka said they were hopeful of a currency swap arrangement with India to tide over the current financial constraints.

“In the post-COVID world, India remains committed to partner Sri Lanka closely for the latter’s sustained economic recovery and shared prosperity”, the Indian High Commission said in a statement.