Colombo: Sri Lanka will receive a loan of $1 billion from Bank of China before the end of the January-March quarter, the chief of the central bank said on Thursday, to help the country meet repayments in the coming months.Sri Lanka is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months.The island nation is a key battleground in the tussle for influence in South Asia between China and traditional regional power India.“We will get the $300 million before end of this month and upsize it to $1 billion. The whole loan will be taken in the first quarter,” Indrajit Coomaraswamy told Reuters.Coomaraswamy said the interest rate for the $300 million loan is around 5.5%. “This is a sovereign loan and does not require any collateral.”Details of the loan have not been previously released. Officials from Bank of China were not available for immediate comment.Coomaraswamy said the 5.5% interest rate is attractive compared to the country’s sovereign bonds in the market.Also read: Sri Lankan Crisis Cannot Be Seen Through India-China Prism: Former Indian EnvoyA series of credit rating downgrades amid a political crisis have made it harder for Sri Lanka to tap international capital markets.Earlier, speaking at a forum in Colombo, Coomaraswamy said the country aims to borrow $2 billion in a combination of dollar denominated sovereign bonds and bonds issued in Chinese renminbi and Japanese yen in the first quarter.Three state-owned banks are in a deal to borrow around another $950 million.“We need to boost the reserves to maintain investor confidence,” he said. “Now there is pretty much enough money lined up to meet repayments.”Investor confidence took a hit when President Maithripala Sirisena abruptly sacked Prime Minister Ranil Wickremesinghe in October, replaced him with pro-China former president Mahinda Rajapaksa and dissolved parliament.Sri Lanka’s top court then ruled the dissolution of parliament was illegal and Wickremesinghe was restored to power in December. The seven-week-long crisis hurt the rupee and drove sovereign bond yields higher, straining state finances.(Reuters)