The Central Bank of Sri Lanka (CBSL) announced that it has secured a US$ 1 billion loan from China. According to CBSL Governor Dr. Indrajit Coomaraswamy, Sri Lanka is perceived to be a key strategic partner in China’s Belt and Road Initiative due to its location.

Coomaraswamy also stated that the terms of the eight year loan provided by the China Development Bank were better than other international lenders with an interest rate of 5.25 percent and a grace period of three years.

The loan follows a pledge made by the Chinese embassy in Colombo to continue providing Sri Lanka with support including funds for development despite IMF warnings about the island nation’s heavy debt.