Thread by @TamlIndependent

Sri Lanka have agreed to borrow a $1.5 billion loan agreement from China, the country's central bank announced on Tuesday.
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Details on the thread below:

Picture Source: AFP / Handout / Sri Lankan Presidential Media Division

They have done this to prevent the SLK exchange rate from falling further as the country grapples with a major foreign exchange crisis and debt repayments.

Continued below:

Colombo had been negotiating for months to get a loan from China as the country’s foreign exchange reserves have slumped amid the pandemic.

Chinese influence in the South Asian nation has grown in recent years through loans and projects under the huge Belt and Road infrastructure initiative, raising concerns among regional powers and Western nations.

Under former president Mahinda Rajapaksa, Colombo borrowed billions from China between 2005 and 2015, amassing a mountain of debt for expensive infrastructure projects.

The Mahinda Rajapaksa returned to power as prime minister in 2019 after brother Gotabaya was elected president

Sri Lanka was forced in 2017 to lease its strategically important Hambantota port to a Chinese company for 99 years after Colombo said it was unable to service the $1.4 billion debt from Beijing that was used to build the port.