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Singapore and Sri Lanka have signed a free trade agreement for the two countries during a three-day visit by Singapore Prime Minister Lee Hsien Loong to the Indian ocean island nation.

A joint statement issued by the two countries said Lee met the Sri Lankan president Maithripala Sirisena on Tuesday and the two discussed strengthening bilateral relations.

The statement says they also witnessed the signing of the trade agreement which "will further deepen the bilateral economic ties"

Lee arrived in Sri Lanka in Monday and will conclude his visit Wednesday.