The government today paid USD 524.68 million (MVR 8 billion) due for the Sukuk issued during the administration of former President Ibrahim Mohamed Solih back in 2021.
The Ministry of Finance stated that this includes the principal amount of the Sukuk, which is USD 500 million, and USD 24.68 million in interest. The government settled this debt using the Sovereign Development Fund (SDF) and the state reserve.
The Ministry of Finance said today that with the settlement of this debt, the ratio of state debt to GDP will decrease, and the Maldives' financial sector will become further strengthened in the upcoming medium term.
The administration of former President Ibrahim Mohamed Solih took the Sukuk in 2021 to pay off the USD 250 million "Sunny Side" bond taken by the previous government. The Ministry of Finance stated that the Sukuk was a debt taken at a high interest rate without an adequate debt-repayment policy.
Since President Dr. Mohamed Muizzu’s government came to power, it has resumed depositing foreign currency into the SDF fund, which had been exchanged (to Rufiyaa) in connection with COVID-19.
In 2024, this government brought changes to the rates of the Airport Development Fee to increase the money entering the fund. This change was brought in a manner that does not pose any burden on Maldivians traveling through the airport.
With these measures, the amount of foreign currency in the SDF fund rose above USD 350 million for the first time. The Ministry of Finance stated that by the end of last March, the state reserve had reached USD 1.3 billion.
The Ministry of Finance mentioned that following the payment of the Sukuk, work is being done in collaboration with financial institutions to seek financial assistance.
Despite doubts raised by some parties regarding the ability to pay the Sukuk due to economic difficulties caused by large debts taken by previous governments, the government has always maintained its assurance that the Sukuk could be paid by the designated date.
Although the final deadline to pay the Sukuk was next Wednesday, President Muizzu told journalists on March 2 that there is no difficulty in paying the USD 500 million Sukuk and that USD 650 million is currently available in the reserve.
