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Loan repayments of MVR 10 million deferred: Finance Ministry

Mariyam Malsa
15 December 2020, MVT 19:03
The Finance Ministry stated that a total of MVR 10 million in debt repayments were defered for 2020. PHOTO: HUSSAIN WAHEED/MIHAARU
Mariyam Malsa
15 December 2020, MVT 19:03

The Ministry of Finance, on Tuesday, revealed that deferred debt repayments for 2020 reached a total of MVR 10 million.

According to the ministry, deferrals for certain payments scheduled between May and December 2020 were secured under the Group of Twenty (G20) Debt Service Suspension Initiative (DSSI).

Under the World Bank's initiative, G-20 countries made commitments to the DSSI in April, pledging to suspend debt service for low-income countries on official bilateral credits.

As a result of the aforementioned leniency, as well as lower rates of T-bill redemption, the ministry revealed that the government had only spent MVR 1.1 billion of the MVR 1.8 billion figure budgeted for debt repayment under the 2020 State Budget.

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.

According to the Ministry of Finance, national debt is projected to reach MVR 70.3 billion by the end of 2020 while this figure would rise to MVR 82.8 billion by the end of 2021. A total of MVR 37.5 billion out of this figure is expected to be external debt.

Heavily reliant on tourism for revenue, the restrictions on international travel over COVID-19 left Maldives vulnerable to severe economic repercussions. 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 Maldivian government estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry.

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