The Maldives government has cleared a major external debt obligation, settling the USD 500 million sukuk issued in 2021, a move that reduces immediate refinancing risks while placing renewed focus on future financing needs.
According to the Ministry of Finance, a total of USD 524.68 million was repaid, including USD 500 million in principal and USD 24.68 million in profit payments. The repayment, equivalent to around MVR 8 billion, was financed through the Sovereign Development Fund and official foreign currency reserves.
The sukuk had originally been issued to refinance a USD 250 million bond that matured in 2021. The Ministry noted that the instrument had been contracted under challenging global conditions and at a relatively high cost, without a clearly defined repayment framework at the time.
The settlement is expected to improve key debt indicators, particularly the debt-to-GDP ratio, and reduce short-term external vulnerabilities. The Ministry also linked the repayment to policy adjustments introduced since 2024, including measures to strengthen foreign currency inflows and rebuild buffers within the Sovereign Development Fund. Foreign currency holdings in the fund have reportedly risen above USD 350 million, while official reserves reached approximately USD 1.3 billion by the end of March.
At the same time, the repayment has drawn down a portion of these buffers, placing greater emphasis on external financing and reserve management. The Ministry stated that the government continues to engage with bilateral and multilateral partners to secure additional financing and manage refinancing risks, including the recent rollover of a bilateral bond and the deferral of a USD 100 million loan.
The Ministry said priority will remain on ensuring the uninterrupted supply of fuel, essential goods, and public services, even as global energy prices are expected to place upward pressure on government expenditure. It also noted that fiscal policy measures are being formulated to reduce the impact of external shocks on vulnerable groups.
The Ministry added that it will continue to assess macroeconomic conditions, maintaining a focus on fiscal and debt sustainability as global uncertainties persist.
