COLOMBO -  India offered a new $500 million credit line to Sri Lanka to fund fuel purchases, the Indian High Commission in Colombo said on Tuesday, as the island struggles to manage its worst financial crisis in years.

The credit line, which was under negotiation since August 2021, will ease pressure on the country's dwindling reserves that dipped to $3.1 billion at the end of December.

Last week India also granted Sri Lanka a $400 million swap arragement to boost its reserves and help repay debt.

(Reporting by Uditha Jayasinghe Editing by Swati Bhat and Louise Heavens)