Sri Lanka has announced plans to send tea to Iran to settle its debt for past oil imports. The barter will help the South Asian country avoid US sanctions for trading with Tehran and save its dwindling foreign currency reserves.
Representatives from the two countries signed a memorandum of agreement affirming that Sri Lanka will clear $251 million in oil import dues to Iran by exporting tea, according to Ramesh Pathirana, head of Sri Lanka’s plantation ministry.
“We hope to send $5 million worth of tea each month to repay Iran for oil purchases pending since the last four years,” the minister said as quoted by Reuters.
The barter won’t “violate any UN or US sanctions since tea has been categorized as a food item under humanitarian grounds while none of the blacklisted Iranian banks will be involved in the equation,” according to the statement issued by the Plantation Ministry.