Sri Lanka is seeking cheaper funding sources to replace its debt of billions with Chinese banks, reports Reuters.

Maithripala Sirisena’s new government is currently engaged in talks planning to replace 70 percent of its $5 billion debt with cheaper loans, unnamed finance ministry officials have said.

The National Freedom Front's Wimal Weerawansa said at the UPFA's inaugural campaign rally that youngsters "deployed" by the current government to "discredit" former president Mahinda Rajapaksa should have boiling hot water thrown on them.

The Reserve Bank of India today signed a “Special Currency Swap Agreement” with the Central Bank of Sri Lanka. The deal allows Sri Lanka to withdraw up to $1.1 billion for a maximum period of six months.

The new agreement is in addition to the existing Framework on Currency Swap Arrangement for members of the SAARC regional bloc.

In March the RBI signed a currency swap agreement with Sri Lanka, worth $400mn and valid for three years.

The swap arrangements are intended to provide a backstop line of funding for countries that are part of the South Asian Association for Regional Cooperation (SAARC) to meet any balance of payments and liquidity crises till long-term arrangements are made.

The Asian Development Bank says private investors are reluctant to make new investments due to the continuing political uncertainty in Sri Lanka.

Britain’s Foreign and Commonwealth Office (FCO,) in their annual corporate report on Sri Lanka, noted that “some concerns” remained despite a number of positive steps in undertaking legal reforms by the new government.

The General Secretary of the United People’s Freedom Alliance (UPFA,) Susil Premajayanatha said that Maithripala Sirisena would not be able to stop a majority party decision to appoint Mahinda Rajapaksa as prime minister.

Over 1 million people from around the world have signed a petition calling on the United Nations to refer Sri Lanka to the International Criminal Court (ICC) or establish a credible International Judicial Mechanism to investigate and prosecute “war crimes, crimes against humanity and genocide committed against Tamil people by the Sri Lankan state.”

The Desha Vimukthi Janatha Party (DVJP), a party predominantly made up of Buddhist monks, will support the UPFA team led by Mahinda Rajapaksa.

The party’s chairman Galagama Dhammaransi Thera, pledged support to Mahinda Rajapaksa, and thanked him for responding to “calls form patriotic forces,” reports island.lk.

In a press release, the Buddhist monk, Galagama Dhammaransi, said,

“It was the UPFA under political leadership of Mahinda Rajapaksa that united this country wiping out terrorism. Neo imperialistic capitalist forces have ganged up once again with the support of all treacherous forces both local and international against the UPFA. The people should take this election seriously and use their votes wisely. They should keep in their mind that their vote would have the power of saving the motherland or to let it become a colony of Western super powers.”

Former president Mahinda Rajapaksa has been appointed as the head of the UPFA’s Election Operations Committee, former minister Dinesh Gunawardena told Ada Derana.

The European Union has announced the deployment of an Election Observation Mission (EOM), to cover the general election in Sri Lanka on August 17.

Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, has appointed Mr Cristian Preda, Member of the European Parliament, to lead the EOM as chief observer.

Ms Mogherini said: “The European Union has once again responded positively to the invitation of the Sri Lankan authorities to deploy an Election Observation Mission. This shows our continued commitment to work with Sri Lanka to strengthen democracy by advancing the openness and inclusivity of the election process".

Chief Observer Cristian Preda is expected to arrive in Colombo in the coming days to join the team of election experts who were deployed today.