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Sri Lanka plans to pay off Iran oil debt with tea

  • Sun Online Desk
  • 23rd December, 2021 04:34:07 PM
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Sri Lanka plans to pay off Iran oil debt with tea

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Sri Lanka plans to settle a debt for past oil imports from Iran by paying it off in tea, a government minister said, BBC reported.

Ramesh Pathirana said his country hoped to send $5m (£3.8m) worth of tea to Iran each month to clear a $251m debt.

Sri Lanka is experiencing a severe debt and foreign exchange crisis, which has been made worse by the loss of tourist income during the coronavirus pandemic.

A member of the country's tea board said it was the first time tea had been bartered to settle foreign debt.

Pathirana said the method of payment would not violate United Nations or American sanctions, because tea was categorised as a food item on humanitarian grounds, and no black-listed Iranian banks would be involved.

Sri Lanka is reported to have to meet about $4.5bn in debt repayments next year, starting with a $500m international sovereign bond repayment in January.