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International relations

Sri Lanka receives $1bn credit line from India

Colombo struggling to pay for imports after plunge in foreign exchange reserves

Sri Lankans earlier this week protest against a worsening economic crisis that has brought fuel shortages and spiraling food prices.   © Reuters

COLOMBO (Reuters) -- Sri Lanka's Finance Minister Basil Rajapaksa signed a $1 billion credit line with India on Thursday to help ease crippling shortages of essential items, including fuel, food and medicine, officials said.

"India stands with Sri Lanka," Indian Foreign Minister S. Jaishankar said in a tweet.

Sri Lanka's foreign exchange reserves have fallen 70% in the past two years to about $2.31 billion, leaving it struggling to pay for imports.

The country will work with the International Monetary Fund (IMF) to find a way out of the crisis, President Gotabaya Rajapaksa said on Wednesday.

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