Central Bank asks tea exporters to repatriate export proceeds within one month – Business News

  • CB says SL has no bridge funding planned for next few months until IMF program is finalized
  • Says it is unfair that Lankan exporters continue to extend credit facilities for up to 180 days when letters of credit offered by local banks are declined
  • Tea Board chief asks tea exporters to negotiate with buyers to reduce credit facilities to 90 days

Given the ongoing forex crisis in the country, with no significant bridging funding planned for the next few months, the Central Bank (CB) has urged tea exporters to convince buyers to repatriate export proceeds within one month instead of continuing to extend the usual 180-day credit facilities.
“This is the time when the country needs your support. You must take action to bring 100% of your export earnings back to the country within a month,” BC Governor Dr. Nandalal Weerasinghe told the 128th Annual General Meeting of the Colombo Tea Traders Association ( CTTA) held in Colombo last Friday.

He argued that it was unfair that exporters continued to extend credit facilities of up to 180 days to buyers while everyone else refused to accept Letters of Credit (LC) facilities offered by local banks. to finance the country’s imports.
Given the current state of the country, he insisted on renegotiating the credit facilities offered to buyers of Ceylon tea.

Dr. Weerasinghe noted that there is no significant bridge financing planned for the country until the IMF program is finalized, which is expected to take several months.
Meanwhile, Sri Lanka Tea Board (SLTB) Chairman Niraj De Mel has encouraged tea exporters to renegotiate with their buyers to reduce credit facilities to 90 days instead of the usual 180 days. days.
However, he acknowledged some practical difficulties in repatriating export earnings over a shorter period, particularly in relation to global supermarket chains where exporters have entered into long-term contracts.

That said, De Mel urged tea exporters to do all they can to support the country at this crucial juncture.
He noted that tea export earnings in recent months have reached around $110-120 million per month, up from $100 million at the start of this year. With 95% of tea exports being net exports, he pointed out that tea export earnings could significantly help the country alleviate its currency crisis. (NC)