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Roughly USD 520 million secured as aid, loans: Ministry of Finance

Ahmed Aiham
07 October 2020, MVT 16:59
Resident Representative for JICA Maldives Mitsuyoshi Kawasaki and Minister of Finance Ibrahim Ameer at the ceremony held to sign the SD 47.5 million (JPY 5 billion) loan agreement extended by Japan. PHOTO: JICA
Ahmed Aiham
07 October 2020, MVT 16:59

Minister of Finance Ibrahim Ameer, on Wednesday, revealed that roughly USD 520 million was guaranteed as loans and free aid to assist the country through the financial recession caused by the COVID-19 pandemic.

During Wednesday's parliamentary session, Minister Ameer, while responding to a question posed by parliamentary representative of Maafannu West constituency MP Mohamed Falah, noted that USD 250 million of the funds will be financed through the State Bank of India (SBI) as a loan, under an agreement with the Indian government, and facilitated through the purchase of Indian Treasury bonds.

The remaining funds will be acquired through the Asian Development Bank (ADB), Asian Infrastructure Bank, European Investment Bank, International Finance Corporation, International Monetary Fund, Islamic Development Bank, Opec Fund For International Development (OPID) and the Japan International Cooperation Agency (JICA).

He further noted that ADB was offering the largest amount of free aid, as half of the USD 50 million guaranteed by the bank was granted under a special provision to the country.

Moreover, Maldives was able to secure a zero-interest loan of USD 28 million from IMF.

Heavily reliant on tourism for revenue, the restrictions on international travel over COVID-19 left the country 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.