MVR 1.4 billion deposited in Sovereign Development Fund

Sovereign Development Fund (SDF) has received MVR 1.4 billion so far this year, according to Ministry of Finance.

The figure accounts for 60 percent of the budgeted MVR 2.1 billion earmarked for 2025.

While the ministry has not disclosed the current total value of the fund, information obtained by Mihaaru News through the Right to Information Act in February revealed that the SDF then stood at MVR 8.9 billion. Of this, MVR 5.3 billion was in local currency and USD 233 million in foreign reserves.

Established in 2017, the SDF is intended to help the government service large external debts. This year alone, the state is projected to spend MVR 10 billion on debt repayments, equivalent to 24 percent of every MVR 100 in revenue.

Finance Ministry has indicated that 62 percent of repayments this year will be sourced through foreign financial institutions. At the same time, the domestic market’s reliance on Treasury bills (T-bills) has risen sharply, with sales reaching MVR 89 billion so far this year.

The government had planned to raise funds this year to prepare for the repayment of a USD 500 million sukuk (MVR 7.7 billion); the single largest debt maturing in 2026. However, there has been no progress in this regard.

MVR 7.6 billion of the SDF is invested in government securities, including T-bills and bonds. Of this, USD 195 million is held in dollar denominated securities, while the remaining is in Maldivian rufiyaa. The Audit Office has said that ensuring the fund’s allocations are used for their intended purpose remains a significant challenge.