Sri Lanka to settle oil import dues to Iran by bartering tea

Sri Lanka plans to settle $251 million in oil import dues owed to Iran by bartering tea, a Sri Lankan minister said on Wednesday, amid dwindling foreign reserves.

Report informs, citing Reuters, that Plantations Minister Ramesh Pathirana told Reuters he aimed to start sending tea to Iran from January. "We hope to send $5 million worth of tea each month to repay Iran for oil purchases pending since the last four years," he said.

Sri Lanka has to meet about $4.5 billion in debt repayments next year, starting with a $500 million international sovereign bond in January, but the country's foreign reserves had dwindled to $1.6 bln at the end of November, latest data from the central bank showed.

Central Bank Governor Ajith Nivard Cabraal said earlier this month Sri Lanka is confident of being able to "seamlessly" repay all sovereign debt that comes due in 2022.

Sri Lanka produces about 340 million kilogrammes of tea annually. Last year it exported 265.5 million kg of tea, making it the largest forex-earning crop, with earnings of $1.24 billion in 2020.