Maldives sells T-bills worth MVR 5.1 billion in 2020

The government of Maldives sold Treasury bills (T-bills) valued at a total of approximately MVR 5.1 billion in 2020.

According to statistics publicised by Ministry of Finance, the aforementioned figure represents an increase compared to the total of T-bills, worth MVR 4.3 billion, that was issued at the year-end of 2019.

Notably, the government issued MVR 3.7 billion in T-bonds with repayment periods of over a year, which represented a 90 percent increase compared to the MVR 435 million T-bonds sold in 2019.

The statistics also revealed that the number of T-bills issued in Maldivian currency exceeded those sold in US Dollars.

As government securities to manage the country's cash flow and deficit, Maldives Monetary Authority (MMA) sells T-bills in four categories with differing repayment periods: 28 days, 98 days, 182 days and 364 days.

The central bank opens T-bill sales on a weekly basis, with the main investors being Maldives Pension Administrative Office (MPAO) along with banks, some companies with state shares and private firms.

Due to challenges posed by the economic repercussions of the ongoing COVID-19 pandemic, the finance ministry previously revealed that banks and some other investors were redeeming the T-bills already issued. The ministry further said that it was difficult to find new investors due to the crisis.

As with numerous countries around the world, amid the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals from March 27 to July 15.

The restrictions on international travel left Maldives' heavily tourism reliant economy in an extremely vulnerable state. In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the pandemic.

The finance ministry later publicised a paper on the current economic and fiscal situation of Maldives, which warned that government revenue for 2020 might be half of what was projected in the State Budget, while the state deficit is expected to reach MVR 13 billion.

Hence, the Maldivian government has moved to secure financial assistance from a number of foreign bodies and countries, to help address the challenges arising from COVID-19 as well as manage the country's economy and finances.