COLOMBO: Sri Lanka's finance minister will visit New Delhi on Tuesday to sign a $1 billion credit line to pay for essential imports of food and medicine, an official said on Monday, as the island nation struggles with its worst financial crisis in years.

The island's foreign reserves have dropped 70% in the last two years to $2.31 billion in February, stalling critical imports including of fuel.

Finance Minister Basil Rajapaksa, who first announced the Indian credit line in February, will sign an agreement for it on Wednesday to pay for essentials including medicine, wheat flour, sugar and rice.

"Sri Lanka imports about $2 billion worth of essential items from India annually, and this credit line will focus on the same items," Milinda Rajapaksha, an additional director general in the media ministry, told Reuters.

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Rajapaksa will also meet India's finance and energy ministers.

Sri Lanka's government last year reached out to India, among other countries, to negotiate credit lines and currency swaps. In January, India announced a $400 million currency swap programme and a $500 million credit line for fuel.

The finance minister will also push to fast-track fuel imports from India, a senior energy ministry official said, asking not to be named.

Soaring global crude prices have hit Sri Lanka hard, with the country struggling to pay for fuel from its meagre reserves after costs increased rapidly in February, and experiencing rolling power cuts and long lines at petrol pumps.

The country is also talking to the International Monetary Fund for possible help.