Sri Lanka seeks $2.2 billion from China as reserves shrink

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

Sri Lanka is seeking $2.2 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 swap facility with China’s central bank.

“Within the next two weeks we should be able to finalise it,” Mr. Cabraal told reporters.

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

Officials said the country was also in talks with China Development Bank for a $700-million loan that would include the equivalent of $200 million being drawn in Chinese currency.