India no longer foresees funding for Sri Lanka in line with the IMF’s progress

India has been the biggest donor of aid this year to its southern neighbor, which is struggling with its worst economic crisis in more than seven decades and struggling to pay for its imports, even though the current situation is less serious than it seems. and July

“We have already given $3.8 billion in aid. Now it’s all about the IMF,” an Indian government source with direct knowledge of the talks with Sri Lanka told Reuters. “Countries cannot continue to give aid.”

A Sri Lankan government source said India’s decision did not come as a surprise and that New Delhi had “signaled” to them a few months ago that there would be little further support on a large scale.

The source, however, said India would be invited to a donor conference that Sri Lanka plans to hold jointly with Japan, China and possibly South Korea later this year.

Another Sri Lankan government source said the talks between India and Sri Lanka for a billion-dollar exchange deal and its request for a second line of credit of $500 million for the purchase of fuel , made in May, they had made little progress.

The sources declined to be named because they were not authorized to speak to the media.

India’s finance ministry, as well as Sri Lanka’s finance ministry and its central bank, did not immediately respond to requests for comment.

Sri Lanka and the IMF reached a preliminary agreement in early September for a loan of about $ 2.9 billion, which is a condition of the country receiving financing guarantees from official creditors and negotiations with creditors.

“Our focus is more on pushing the IMF program forward and getting out of this mess ourselves,” said one of the Sri Lankan sources.

Sri Lanka has been scrambling to use its limited foreign exchange reserves to meet fuel imports and reallocate funds from multilateral agencies to other critical imports, including fertilizers, cooking gas and medicines, the other source said. Sri Lanka.

The country of 22 million people has battled shortages of basic necessities, including fuel, food and medicine, for months after its foreign currency reserves hit an all-time high, stalling imports and sparking unrest in an unprecedented audience.

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