USD 50 Million Paid as Foreign Debt

Ministry of Finance has revealed USD 50 million (MVR 777 million) has been paid as foreign debt.

As per the weekly fiscal development published by the Finance Ministry, MVR 2.8 billion has been allocated for loan payments this year and of this MVR 777 million has now been paid. The report further states that MVR 3.3 billion has been paid as foreign debt in the last 3 years and therefore the amount allocated for debt repayment this year has increased. Additionally, MVR 13.4 million has been paid to Multilateral Agencies in the last 3 years as well.

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Finance Ministry has previously stated that the foreign debt will rise to MVR 100 billion by the end of this year and that most of them are owed to China and India.

US investment bank, JP Morgan, issued a statement saying that the Maldives is among the countries that are at the risk of falling into the same economic situation like Sri Lanka, with the foreign reserve expected to be exhausted soon, leaving the country debt-ridden and unable to pay off loans.

However, Minister of Finance Ibrahim Ameer has stated the Maldivian economy is still in a strong position, and there is no risk that the country will default on its debts.

The finance minister further noted the Maldives did face the risk of defaulting last year, with a USD 250 million bond maturing in June this year. However, the minister noted that USD 192 million of the bond has been paid back with the help of Sukuk liability management carried out in 2021. He added the government has the funds to pay off the remaining USD 62 million, which includes interest.

Minister Ameer also said the Maldives has USD 800 million in its usable reserve. He said the biggest loan to pay back is due in 2026, and there is no concern that the country would not be able to pay off this loan.

To view the full report, click here.

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