MVR 26.3 billion in financing required for debt and budget deficit

Minister of Finance Moosa Zameer today stated that a total of MVR 26.3 billion in financing is required for the repayment of debt and the budget deficit next year.

While presenting the budget for the coming year to the Parliament, the Minister noted that the amount of financing that needs to be secured is very large due to the significant expenditure required to repay Sukuk bonds in 2026.

"As the Minister of Finance and Planning, confronting the huge responsibility of repaying the USD 600 million Sukuk that needs to be settled in one go in April of next year, my greatest comfort is the existence of a thriving and resilient growing economy," he said.

The total budget financing includes MVR 12.9 billion required for debt repayment. Additionally, MVR 8.8 billion is needed to finance the budget deficit for the upcoming year.

To secure the total required financing, the government has planned to acquire MVR 16.8 billion from external sources next year through loans, bonds or Sukuk issuances, and multilateral or bilateral financing. Although MVR 14 billion was allocated for financing in this year's budget, the amounts designated to be sourced externally have not yet been fully received.

Zameer stated that under a cautious non-debt-incurring policy to repay the Sukuk, the current administration has put the Sovereign Development Fund (SDF) back on track and converted it into a fund managed in USD.

"The Fund today holds more than USD 100 million in cash, securely saved for the crucial purpose of debt repayment. And the repayment of refinanced debt will be planned using a specified amount from the money deposited into the Sovereign Development Fund," the Minister said.

He announced that USD 450 million (MVR 6.9 billion) will be sought from external parties to refinance the Sukuk. Zameer added that USD 300 million (MVR 4.6 billion) planned for budget support, which was secured due to President Dr. Mohamed Muizzu's trips to friendly nations, is also included in the financing plan.

He estimated that approximately MVR 5 billion will be sourced from domestic financial institutions. He also mentioned that MVR 4.2 billion from the funds deposited into the Sovereign Development Fund, which was established to enhance foreign debt repayment capacity, is planned to be used for debt servicing.