Investors have regained confidence in the Maldives’ ability to meet its debt obligations, Minister of Finance and Planning Moosa Zameer has said, citing fiscal reforms and repayment planning undertaken by the current administration.
The Maldives issued a USD 500 million sukuk in 2021, equivalent to around MVR 7.7 billion, with two annual coupon payments of USD 25 million each. The government has allocated MVR 9.3 billion in the current budget to meet the sukuk repayment, which is due in April.
Following the change in administration, concerns over potential default and bankruptcy featured prominently in assessments by financial institutions, with Maldivian sukuk and other sovereign debts flagged as at risk. These concerns contributed to a sharp decline in the value of Maldivian securities in international markets.
According to the Ministry of Finance, the sukuk was trading at around 67.4 cents to the dollar in early April amid heightened default concerns. Since then, prices have recovered significantly, reflecting improved market sentiment. The sukuk has reportedly been trading above 90 cents on the dollar since July last year, indicating renewed investor confidence as the instrument approaches maturity.
The ministry has attributed the recovery to measures taken to strengthen fiscal discipline, improve economic management, and ensure timely debt servicing. The government has also confirmed that funds required for sukuk profit payments are being collected as planned, in line with commitments made during the presentation of the previous budget.
Zameer said the administration remains confident that the sukuk will be repaid on schedule, adding that the inclusion of the repayment in the national budget demonstrates the government’s intention to meet its international financial obligations without delay.
The recovery in sukuk prices suggests that investors now view the Maldives’ debt outlook more favourably, supported by budgetary provisions and ongoing economic reforms.
