The Reserve Bank of India has granted permission to the commercial bank Indian Bank to open three special vostro accounts for trading with Sri Lanka using the Indian rupee. The accounts are expected to start working in the coming days. Representatives of the Indian central bank noted that vostro accounts in local currency will allow Sri Lanka to import goods from India without spending dwindling reserves of US dollars. In addition, Sri Lanka will be able to use credit lines in rupees opened by India, which will contribute to the stabilization of the Lankan economy. Earlier, India provided Sri Lanka with a financial package worth about $4 billion. Sri Lanka is currently experiencing the worst economic crisis since independence in 1948, caused by a shortage of foreign currency due to the coronavirus pandemic. In mid-April last year, the Sri Lankan authorities defaulted on the external debt for the interim period. The island state's external debt is currently estimated at $51 billion. It is worth noting that the Government of India allowed the use of the rupee in international trade settlements back in November 2022. As noted by the Ministry of Trade, this will contribute to the promotion of exports within the framework of foreign trade policy.
