India-Sri Lanka Business Summit: Sitharaman stresses on bilateral arrangements in regional currencies

Emphasising on the importance of bilateral agreements between the countries, Indian finance minister Nirmala Sitharaman on Thursday said that the global multilateral treaties are now receding.

She also said that there is clear interest in having bilateral arrangements in regional currencies.

Speaking at the India-Sri Lanka Business Summit in Colombo, Sitharaman said: “Global multilateral treaties are now receding. It is not happening. People are not wanting to talk about multilateral agreements. It might revive... All over the world, there is clear interest in having bilateral arrangements, arrangements in regional currencies.”

Everybody is concerned about the conflict in the Middle East, the Ukraine war and the possibility of spike in fuel prices, she added.

Due to the ongoing war between Israel and Hamas, crude oil prices have touched a mark of $96 a barrel on fears of war spreading to the rest of the Middle East region, thereby disrupting supplies.

In her speech, Sitharaman stressed on the importance of bilateral pacts between the countries and said that India and Sri Lanka should also consider such an economic arrangement.

“Arrangements so that you can ensure there won't be any shocks because of currency volatilities, arrangements so that there are no foreign exchange-driven crises, arrangements that you are sure between the two countries that your food security is in place, your energy won't go through a roller coaster ride. India and Sri Lanka should also benefit from such a bilateral arrangement,” said the finance minister.

She said that when Sri Lanka faced its unprecedented economic crisis last year, “we felt it was our duty to stand with our friends in Sri Lanka. We could not bear the difficulties our friends in Sri Lanka had to face. Our government and the people of India acted collectively and came to the assistance in record time.”

“India rendered unprecedented financial assistance of over $4 billion for the people of Sri Lanka. We were the first bilateral creditor to convey financing assurance to the International Monetary Fund (IMF), which paved the way for others to provide similar assurances that formalised the IMF program for Sri Lanka,” added Sitharaman.