The government of Maldives sold Treasury bills (T-bills) worth MVR 2.9 billion over the past six months.
According to statistics publicised by the Ministry of Finance, T-bills in Maldivian currency amounting to MVR 2.4 billion, and in US Dollars amounting to over MVR 500 million, were cumulatively sold.
In comparison, a record total of T-bills worth MVR 4.3 billion were sold by the end of 2019.
As government securities to manage the country's cashflow 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.
However, due to challenges posed by the economic repercussions of the ongoing COVID-19 pandemic, the finance ministry noted 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.
On April 12, the World Bank estimated that Maldives will see the worst economic recession in South Asia over the coronavirus 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.
As a result, the Maldives Monetary Authority (MMA) disclosed that the government overdrew more than MVR 4 billion over the past four months.
According to June's balance sheet released by the authority, the funds were released through the Public Bank Account (PBA) in order to compensate for the economic shortfalls.
Maldives has requested the support of the international community as well as foreign financial institutions to provide assistance to the country. As such, Maldives has acquired a total of USD 189.5 million (MVR 2.9 billion) in aid.
As with numerous countries around the world, amid the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals on March 27, halting the issuance of on-arrival visas. The closure of borders remained in place until June 15.
Heavily reliant on tourism for revenue, the restrictions on international travel left the country vulnerable to severe economic impacts.