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Government owes MVR 1.5 billion more to SBI

Mariyath Mohamed
20 February 2024, MVT 16:31
Ministry of Finance.-- Photo: Fayaz Moosa / Mihaaru
Mariyath Mohamed
20 February 2024, MVT 16:31

The government still owes USD 100 million (MVR 1.5 billion) to State Bank of India (SBI) this year in return for a t-bond sold earlier, Mihaaru reports.

A senior official with credible information of the transaction revealed to Mihaaru that this t-bond was sold to SBI by former President Ibrahim Mohamed Solih's administration in January 2019, taking USD 150 million (MVR 2.3 billion) in exchange. Out of this, USD 100 million (MVR 1.5 billion) remains unpaid. Last month, USD 50 million (MVR 770 million) of this bond was paid off.

These funds, requested by the former administration for budget support, were released in three installments of USD 50 million (MVR 770 million) by the bank. Two payments of USD 50 million are due to be paid back by the government in coming April and July.

The funds received through SBI at the time were those pledged as aid by India when the former administration assumed office. The official who spoke to Mihaaru said that the understanding at the time had been that the funds, although given as budget support at the time, would be transferred to free aid at a later date. However, this has not been done, and instead SBI has done roll over and extended duration of the bond and held it for the last five years.

While a loan has been taken from BML to pay off the bond, last January, Finance Ministry has announced that it is seeking USD 550 million (MVR 8.5 billion).

The government has to seek MVR 14 billion as budget deficit this year. MVR 3.9 billion of this will be sought from domestic market, while the remaining MVR 12.3 billion will be sought from abroad.

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