COLOMBO: Sri Lanka has extended a credit line with India by $200 million in order to procure emergency fuel stocks, the country's power and energy minister said on Monday, with four shipments due to arrive in May.

Crisis-hit Sri Lanka says IMF bailout three months away

Colombo was also in talks with New Delhi over extending the credit line by an additional $500 million, minister Kanchana Wijesekera told a news conference.

Sri Lanka’s economy has been hit hard by the pandemic and tax cuts by President Gotabaya Rajapaksa’s government.

On Sunday, thousands of supporters of opposition parties rallied in the commercial capital Colombo as a weeks-long political and economic crisis showed no sign of abating.

Dwindling foreign currency reserves have left the island nation of 22 million people struggling to pay for fuel, food and medicine imports and brought thousands onto the streets in daily protests that have occasionally turned violent.

On Sunday, opposition parties ended a week-long march from the central city of Kandy, with thousands of supporters thronging Colombo’s Independence Square.

Many carried Sri Lankan flags and wore headbands reading “Gota Go Home”, one of the main rallying cries of the protests.

Crisis-hit Sri Lanka says IMF bailout three months away

Meanwhile, an International Monetary Fund bailout package could take up to three months to arrive, the country’s central bank chief said on Friday.

Central bank chief Nanadalal Weerasinghe said he was hopeful of a staff-level agreement with the IMF within two months, but a final deal would take another three weeks.

“The key objective is to achieve debt sustainability before an IMF program,” Weerasinghe had said, adding that experts will be named shortly to renegotiate Sri Lanka’s external debt estimated at $51 billion.

Two weeks ago, Sri Lanka announced it was defaulting on its foreign debt after running out of foreign exchange to import even the most essential supplies.