International Monetary Fund (IMF), on Tuesday, stated that there was a risk of Maldives being unable repay its debts, but also highlighted that financial policies set by the government and the Maldives Monetary Authority (MMA) were adequate.
During a press conference held in MMA regarding IMF's regular work to access the financial situation of Maldives and provide technical assistance, the leader of the IMF team, Philippe Karam commended state efforts to resolve debt related issues.
“Maldives is not currently under debt distress. However, there is a high chance of going into debt distress”, he said.
Karam emphasized the importance of careful debt management to ensure that the sustainable operation of the financial sector. According to the expert, medium-term debt levels are predicted to increase.
IMF also commended the work done by local institutions to record and publicize exact debt figures.
“The new government is well aware of the situation" stated Karam. He also highlighted that the government had taken measures to secure financial aid from neighbouring countries in the future.
IMF suggested several methods for Maldives to further improve its debt situation. One of the suggestions included the introduction of stricter financial regulations and strengthening policies that deal with state finances.
Moreover, IMF also advised that development projects should be carried out at reasonable rates which match the country's capacity. IMF had made the same suggestion in 2016 as well.
IMF has been closely monitoring the financial situation of Maldives and providing technical aid in improving the financial regulations of the country. This includes strengthening the policies regarding state finances and ensuring that investments are carried out within a reliable system.
In response to a question posed by local media outlet Mihaaru, the representatives stated that Maldives had followed many IMF suggestions made in 2016. However, they also noted that there is still a considerable amount of work to be done.
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