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Sri Lanka hopeful of starting tea-for-oil barter with Iran in July

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Sri Lanka is reportedly set to start bartering tea to Iran next month in lieu of USD250 million owed for oil, as the country tries to lift sales to a key market and protect the forex reserves.

The barter was agreed in 2021 for oil imported in 2012, but the exchange was delayed after Sri Lanka’s unprecedented dollar shortage last year plunged the economy into its worst financial crisis in more than seven decades.

Speaking to the Reuters News Agency, Sri Lanka Tea Board Chairman Niraj de Mel has said the programme is a timely initiative as the country will get access to an important market and both Iran and Sri Lanka can trade without relying on dollars.

Chairman Niraj de Mel has said the agreement was to send USD5 million worth of tea each month for 48 months but initially it will be around USD 2 million per month.

Globally popular Ceylon Tea is Sri Lanka’s highest foreign exchange-earning crop, brewing USD 1.25 billion for the country last year, according to government data.

Iran has been one of Sri Lanka’s main tea buyers but exports have fallen steadily from USD 128 million in 2018 to USD 70 million last year as U.S. sanctions on Iran hit trade.

A significant share of Sri Lanka’s tea is now shipped to Iran via the United Arab Emirates (UAE), official data shows, with the UAE more than doubling its tea imports from Sri Lanka to USD 118 million last year from USD 48 million five years ago.

Under the barter programme, the Ceylon Petroleum Corporation that bought the oil will give rupees to the Tea Board to ship tea via Sri Lankan exporters.

Iranian tea importers will then pay riyals to the National Iranian Oil Company.

Chairman de Mel added that, “We are awaiting the final documents and hope to start exports from July.”

Sri Lanka’s foreign exchange reserves grew to USD 3.5 billion at the end of May – a 14-month high – helped by increased remittances and tourism inflows after securing a USD 2.9 billion bailout from the International Monetary Fund.

Source: Reuters

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Sri Lanka Mirror wishes everyone a happy Sinhala and Tamil New Year!

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The 2024 Sinhala and Tamil New Year dawned at 09.05 pm last night (April 13).

‘Sri Lanka Mirror’ extends heartfelt New Year greetings to all our readers. May this upcoming year be filled with boundless happiness, prosperity, and success for each and everyone of you.

–  Sri Lanka Mirror team

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Derailed train causes delays on coastal line

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A train has derailed at the Kalutara South railway station on Saturday morning (13).

Trains operating on the Coastal Line are thus experiencing delays, Sri Lanka Railways said.

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Kristalina Georgieva to head IMF for a 2nd term

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The Executive Board of the International Monetary Fund (IMF) has selected Kristalina Georgieva to serve as IMF Managing Director for a second five-year term starting on October 1, 2024.

The appointment comes ahead of the start of the fund’s spring meetings in Washington next week.

Georgieva, who has been in the role since the autumn of 2019, was the sole candidate for the position. However, it was only after European leaders signalled that they would endorse her last month that her candidacy was assured.

In a statement, the coordinators of the Executive Board, Mr. Afonso S. Bevilaqua and Mr. Abdullah F. BinZarah has said, “Looking ahead, the Board welcomes Ms. Georgieva’s ongoing emphasis on issues of macroeconomic and financial stability, while also ensuring that the Fund continues to adapt and evolve to meet the needs of its entire membership. It recognizes her focus on strengthening the Fund’s support to its members through effective policy advice, capacity development and financing. The Board looks forward to continuing to work closely with the Managing Director.”

“I am deeply grateful for the trust and support of the Fund’s Executive Board, representing our 190 members, and honored to continue to lead the IMF as Managing Director for a second five-year term,” Ms. Georgieva has said.

The Bulgarian national has served as Managing Director since October 1, 2019. The Managing Director is the chief of the IMF’s operating staff and Chair of the Executive Board. The Managing Director is assisted by four Deputy Managing Directors in overseeing the Fund’s operations, which serve its membership through about 3,100 staff.

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