USD 443 million (MVR 6.7 billion) needed as budget support for next year is to be sought through foreign commercial banks, the proposed budget for 2025 says.
USD 443 million (MVR 6.7 billion) needed as budget support for next year is to be sought through foreign commercial banks, the proposed budget for 2025 says.
According to the budget proposed by the Ministry of Finance, 70 percent of the MVR 9.4 billion needed for the budget will be sought through foreign loans. MVR 9.1 billion for the budget will be sought from foreign sources. In addition to budget support funds, MVR 5.1 billion is to be sought for other projects as well.
While large amounts have been cited to be arranged through foreign loans, the government has been unable to source even 90 percent of the amount allocated as such in these year's budget.
This is due to Maldives' credit rating being decreased, resulting in difficulties in receiving foreign financing. Hence, this year's loans from the domestic market has significantly risen.
The difficulties in sourcing budget financing were highlighted in MMA's advice regarding this year's supplementary budget as well. MMA said that while there is a major dependence on T-bills to manage expenses, the current market trend shows a decrease in sale of securities to banks that buy T-bills. This also poses challenges in getting the MVR 2.9 billion stated in the budget as to be sourced from the domestic market, MMA said.
A budget of MVR 57 billion was proposed to parliament last week. The bill is now at the committee stage for review.
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