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Sri Lanka has asked to open a vostro account in Indian banks

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India’s rupee trade settlement mechanism, a means of using rupees instead of dollars and other big currencies for international transactions, is attracting interest from more countries.

Tajikistan, Cuba, Luxembourg and Sudan have begun talking to India about using the mechanism, according to two sources and an official document reviewed by Reuters.

It has already been used by Russia following the imposition of sanctions on Moscow over the Ukraine war.

The Reserve Bank of India (RBI) set up the mechanism in July. The Government is looking to bring countries that are short of dollars into the mechanism, said a Government official and an industry source aware of the development. The sources declined to be named, as the matter is confidential.

The four countries have shown interest in opening special rupee accounts, called vostro accounts, but partner banks in India have not yet provided those facilities, documents showed. Opening of these accounts needs approval from the Reserve Bank of India.

Mauritius and Sri Lanka have also shown interest, and have seen their special vostro accounts approved by the RBI, documents showed.

India’s Central Bank (CB) has given approval to banks to open 12 vostro accounts for trade in rupees with Russia, according to the document.

Six other accounts, including five for trade with Sri Lanka and one for trade with Mauritius have been authorised, the same document showed.

Queries sent to the federal finance ministry, commerce ministry and RBI remained unanswered.

India continues to discuss denomination of trade in rupees with larger trading partners, including key oil suppliers Saudi Arabia and United Arab Emirates.

Details of potential rupee-dirham trade mechanism are being firmed up by the central banks of India and UAE, a second Government official said, requesting anonymity.

Talks with Saudi Arabia on a rupee-riyal trade mechanism also continue, the government official added. The UAE and Saudi Arabia are talking through ways to invest Indian rupees they earn as part of these transactions, as the gulf nation’s exports to India exceed imports from it.

“We have presented the option of investing additional rupees in Indian markets,” the official said. As part of the rules issued earlier this year, the Indian central bank has allowed for any rupee holdings to be invested in government securities.

Source –  Reuters

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No COVID-19 deaths yesterday

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No COVID-19 deaths have been confirmed yesterday (01) by the Director-General of Health Services.

Accordingly, the current COVID-19 death toll remains at 16,828.

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‘They were plotting to kills us’ – Wasantha reveals it all (Video)

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The Convener of the Inter-University Students’ Federation Wasantha Mudalige attended a media briefing for the first in 167 days on Thursday (2).

At this media briefing, he made certain startling revelations about what he experienced during his detention.

According to Wasantha Mudalige he was arrested by a police officer identified as ASP Mahinda Wiloarachchi from the Peliyagoda Special Police Unit.

Mudalige said he was taken to the Peliyagoda Police and thereafter to an emptied out Enderamulla Police where ASP Mahinda Wiloarachchi from the Peliyagoda Special Police Unit had a pistol on the table pointed at him in a bid to instill fear.

“At the Enderamulla Police, the person identified as ASP Mahinda Wiloarachch placed a pistol on the table pointed towards me, and asked if I recall what happened to Wijeweera and Vijaya Kumaratunga. He said that is what I deserved, however given the situation I would not be killed. He hinted to return in a few years, by late post,” said Wasantha Mudalige.

Furthermore, he said that following his arrest he was moved to the basement room of the Foreshore Police Dorm and kept in the dark, and later moved to the car park close to the Nawagamuwa Devalaya.

“There is a 10 feet drop to the river. They took us there, handcuffed us, placed their weapons all around and started making phone calls. The officer said over the phone that we have arrived at the location. The vehicle was placed there, arousing suspicions, and a police officer assigned to the security of the Nawagamuwa Devalaya came and inquired over the suspicious vehicle. The police officers saw this, and wanted to chase away that inquiring police officer. That was how they acted,” he told the press.

He also added that one particular police officer revealed that this was the method used to kill the underworld members, including the one-time don Makandure Madush.

Wasantha Mudalige also revealed that the officer from the Terrorist Investigations Division ASP Ratnayake who took over the investigation is also the main accused in the case filed over the murder of a person called Army Suranga who was killed after being arrested.

“While there were officers like ASP Wiloarachchi from the Peliyagoda Police, and ASP Ratnayake from the TID many other police officers protected us. When we were taken away in secret to police stations, the police officers who were at those police stations protect us. That is why we are able to come forward and speak like this today,” he revealed.

(newsfirst.lk)

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Paris Club to give SL financing assurances amid IMF debt talks

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The Paris Club of creditor nations is ready to provide financing assurances to Sri Lanka, a key step needed to unlock a $2.9 billion bailout by the International Monetary Fund (IMF), two sources with direct knowledge of the matter told Reuters.

The informal group of bilateral lenders is set to “soon” announce its support to the crisis-hit nation on a debt overhaul, said one of the people, who asked not to be named because talks are private.

The Asian island nation, which is grappling with soaring inflation, a recession and currency depreciation, entered into a staff level agreement with the IMF last Septemberග

But it needs financing assurances from key bilateral lenders before the fund’s executive board approves the programme.

Sri Lanka’s public debt stood at 122% of GDP, of which 70% is denominated in foreign currency, according to data in a country presentation to investors in November.

China and India, both non-Paris Club members, are the top bilateral lenders. “Paris Club assurance is not reliant on China,” said the source.

Another source said the informal group is currently reaching out to other non-Paris Club besides China on financing assurances, but did not provide any further details.

India previously committed to help ease the debt burden of neighbour Sri Lanka as part of the IMF programme, and China’s Eximbank offered a two-year moratorium in a letter sent to the island nation in January.

(Reuters)

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