Sri Lankan Finance Minister Ravi Karunanayake has rejected statement of Chinese Ambassador that latter's country has provided all loans at 2 percent to Sri Lanka. In a statement, Mr. Karunanayke said that China is a very close friend, but the statement made by the Ambassador is not true. His comments came in the wake of Chinese Ambassador Yi Xianliang's statement on Tuesday that it was unfair for Sri Lanka to term loans given by China as expensive. He had asked why Finance Minister sought fresh loans from China, if the interest rates were too high. <br/><br/>Finance minister Karunanayake explained that while development loans are at 2 percent, there are commercial loans given at an interest of 6 to 8 percent. Therefore, on an average, Chinese loans have come at an interest rate in excess of 5 percent. He added that the government has obtained loans from the ADB, the World Bank, the IMF, and others at an interest of less than 2 per cent.<br/><br/>Mr. Karuananyke had earlier said that they are exploring means to pay off high interest loans taken during the rule of former President Mahinda Rajapakse. The latter was considered close to China and had borrowed heavily from China for infrastructure projects. One of the main Chinese projects of port city in Colombo was shelved after the current government replaced Rajapakse regime last year. However, the project was renegotiated and is being developed as Colombo Financial city. China has been investing in Sri Lanka as part of its One Belt One Road strategy to secure transport and shipping lines.