New Delhi : Fearing a run on the rupee in the event of having to pay nearly 6 billion in past dues to Iran, the government has asked oil refiners to gradually buy dollars/euros and be ready to clear all dues by the year end, reports PTI.
Since February 2013, Indian refiners like Essar Oil and Mangalore Refinery and Petrochemicals have been paying in rupees to UCO Bank 45% of their payment due on purchase of oil from Iran. The rest has been accumulating, pending finalisation of a payment mechanism. They had last year paid nearly $3 billion in six installments through a limited payment channel following start of nuclear talks between the West and Iran. The outstanding has since climbed to nearly $6 billion.
A top official said the government expects that payment channels will open in the next 3-4 months following progress in talks between Iran and US-plus five world powers. Sudden dollar buying of up to $6 billion would also lead to liquidity tightening, a situation the government wants to avoid at all costs.
