Former President Mohamed Nasheed has said the government’s decision to repay a major sukuk without taking on additional debt has strengthened confidence in the country’s financial management.

In a post on X, Nasheed welcomed the move, describing it as a positive signal for the economy.

The government repaid USD 524.68 million (MVR 8 billion) ahead of the April 8 deadline for the 2021 sukuk issued during the administration of former President Ibrahim Mohamed Solih.

According to the Ministry of Finance, the repayment included USD 500 million in principal and USD 25 million in interest. The debt was settled using the Sovereign Development Fund (SDF) and state reserves.

The ministry said the repayment would reduce government debt as a share of GDP and strengthen the Maldives’ financial position in the medium term.

The sukuk was issued in 2021 to refinance a USD 250 million “Sunny Side” bond during Yameen's administration. The Finance Ministry has previously said the sukuk carried relatively high interest and lacked a clear repayment strategy.

Under the current administration of President Dr Mohamed Muizzu, foreign currency deposits into the SDF have resumed, alongside adjustments to airport development fees in 2024 aimed at boosting inflows without placing additional burden on Maldivian travelers.

As a result, foreign currency holdings in the SDF have exceeded USD 350 million for the first time, while total state reserves stood at USD 1.3 billion at the end of March, according to the ministry.

Following the repayment, the government is continuing engagement with financial institutions to secure further financial support.

The administration has consistently maintained that it would meet the sukuk obligation on time, despite concerns raised over repayment risks amid broader economic pressures linked to high public debt.