Of the USD 550 million needed to cover government expenditures, USD 50 million will be raised by the sale of bonds. The remaining amount will be raised by allocating financing to other instruments.
Finance Minister Dr. Mohamed Shafeeq has stated that the funds for the budget will be raised in such a way that it will not burden the state.
In an exclusive interview with Mihaaru News, he said that substantial efforts are being undertaken to raise the necessary funds for the budget.
Minister Shafeeq said many international financial institutions have expressed their interest in the state's announcement of a USD 550 million (MVR 8.5 billion) loan to cover government expenditure.
"Some financial institutions and private parties have also shown their interest. However, we will make any financial decisions after seeking the most beneficial way. We do not want to borrow at very high costs [high interest rate] and go forward with an unsustainable option," he said.
Of the USD 550 million needed to cover government expenditures, USD 50 million will be raised by the sale of bonds. The remaining amount will be raised by allocating financing to other instruments.
The state has received USD 10 million (MVR 150 million) in aid since the new government took office. These funds are allocated for the government's recurrent expenditures.
According to Minister Shafeeq, a large portion of the funds should be allocated to repaying the government's debts to the private sector.
He added that USD 10 million is a small amount compared to the expenditure that has to be incurred, and the government is taking important steps to reduce expenditure. As a result, the revenue for the first two months of this year, less than expenditure, is being spent on paying pending bills.
The total state debt is currently at MVR 124 billion, which is more than 100 percent of the country’s GDP.
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