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Newsline: Ambassador to Beijing says Sri Lanka not caught in a China debt trap

Sri Lanka is not caught in a debt trap by China, according to its ambassador in Beijing, as the Indian Ocean island nation seeks help to overcome its most severe economic woes in decades, a situation leading to public unrest and a political crisis for the government. (https://finance.yahoo.com/news/sri-lanka-not-caught-china-093000710.html) Speaking with the South China Morning Post, envoy Palitha Kohona admitted his country was in a difficult situation and had asked for financial support to help it get through the spiralling economic crisis which had led the government to raise interest rates, devalue its currency and curb imports of non-essential goods. Authorities in Sri Lanka have asked for a US$1 billion loan from China to meet the existing repayments to China, and a further US$1.5 billion credit line to buy Chinese goods. Colombo is also expected to discuss a potential loan programme with the Washington-based International Monetary Fund “in the coming days”, according to Kohona.

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