SL to settle US$ 42mn oil money to Iran by February

Sri Lanka will settle its US$ 42 million in arrears to Iran on past oil bills this February, the International Monetary Fund said last week.

“Following the establishment of a payment platform, external arrears with the Export Development Bank of Iran are being paid based on a schedule shared with the Iranian authorities and will be cleared by February 2018,” the IMF said in a report. Sri Lanka had accumulated US$ 42 million in arrears by mid-2017 and US$ 13 million of this were accumulated in 2016 and 2017 due to continued difficulties in establishing the payment platform.

The arrears began in 2013 due to payment barriers arising from the sanctions imposed on Iran by the US.

The continued increase in arrears over the last two years was a breach of the continuous performance criterion of the US$ 1.5 billion balance of payments loan provided to Sri Lanka, linked to economic reforms. The IMF had provided a waiver for the two breaches in mid-2017.