China has refused a loan request by Sri Lanka for $500 million, saying that it would only approve “project loans”, reported the DailyMirror.
Sri Lanka had sought the loan in order to buy petrol products. An official with the Finance Ministry said that China was only prepared to grant project loans for which interest rates were relatively high.
China is now Sri Lanka’s biggest lender, with a total of US$3.1 billion obtained in loans and export credit to Sri Lanka in 18 months, at interest rates varying from 2.9% to 8.25%.
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