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Main challenge is the economic status inherited from former administration: President

Mariyath Mohamed
20 February 2024, MVT 17:32
President Dr Muizzu speaking with the residents of Faresmathoda at a public gathering held at the island this morning.-- Photo: President's Office
Mariyath Mohamed
20 February 2024, MVT 17:32

President Dr Mohamed Muizzu has said today that the main challenge faced when his administration came to power is the critical status of the economy left behind due to the extensive debts of the previous government led by former President Ibrahim Mohamed Solih.

The President made these comments while speaking at a gathering held at Faresmathoda School this morning where he met with the residents of the island during his ongoing trip to the four southernmost atolls.

The President revealed that, when he assumed office, he was faced with foreign debts amounting to MVR 120 billion. In addition to this, he said that there were about MVR 9 billion more in debts by state owned companies owed to several private entities.

"This is the situation we were met with. In addition to the MVR 120 billion we citizens were left to pay to foreign parties, there was an addition MVR 9 billion. These three months have gone in efforts to pay back all this money," he said.

"So this isn't money owed by us after we came to office," he clarified.

He said that some political party leaders were shaping their comments to imply that these are loans that came to be owed after President Muizzu's administration came into office.

However, the President assured that these dues will be paid without resorting to printing additional money. He said that printing money and issuing payments may seem like the easy way out, but doing so would only push the economy further into a downfall.

"[If we do so] we will fall deeper into trouble, we will never be able to recover," he said.

The President said that recognizing that it is crucial to bring a halt to printing money in order to save the economy, the practice had been brought to an end effective from December 31, 2023.

The President alleged that more money has been printed within the past five years than collectively over the past forty. This, he said, has caused the value of rufiya to go down and caused further challenges to the economy.

He also claimed that the former government had exchanged much of the funds in the Sovereign Development Fund to local currency. At present, efforts are being made to deposit dollars in that fund again to facilitate repayment of loans.

President Muizzu highlighted that several development projects have been commenced despite the economical challenges faced.