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Govt deposits MVR 163 Million to SDF in two months

Mohamed Rehan
12 March 2023, MVT 08:19
The Ministry of Finance in the capital city of Male'. PHOTO: MIHAARU
Mohamed Rehan
12 March 2023, MVT 08:19

The Maldives government has deposited a total of MVR 163 million to the Sovereign Development Fund (SDF) over the last two months.

The 2023 state budget outlines an annual total deposit of MVR 870 million to the SDF, of which 18 percent has already been deposited.

By the end of the previous fiscal year MVR 820 million was transferred to the fund; by the end of January 2023, the SDF had amassed a total of MVR 6.4 billion.

Former president Abdulla Yameen established the fund in 2017 to repay foreign loans and for government expenditure when necessary. It was created as a safety measure in case the government was unable to repay foreign debts, for large-scale urban development projects, and during economic crises. SDF functions separately from the Maldives Monetary Authority’s (MMA) national reserve but is another state fund used in difficult situations.

The government spends almost 70 percent of the fund on Treasury Bills (T-Bills) to adjust state expenditures and invests in commercial banks as fixed deposits. The government previously managed the fund through a committee formed with MMA, but in 2022, the Ministry of Finance took full control of it.

Ninety percent of the government's fiscal reserve is in Maldivian Rufiyaa, while only 10 percent is in US Dollars. The government exchanged dollars from the reserve during the 2020 Covid pandemic due to dollar constraints.

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