Deposits to Sovereign Development Fund now in dollars: Finance Ministry

In order to change all funds in the Sovereign Development Fund (SDF) into dollars, Finance Ministry has stated that all money deposited to the fund will now be in dollars.

The ministry said the fund has collected MVR 7.4 billion as of present. Within the last two weeks, approximately $13 million has been deposited to the fund.

As per the fund estimations for this year, SDF reports that MVR 14 billion was received by the SDF as Airport Development Fee.

Additionally, MVR 1.4 billion under cross subsidy projects and MVR 2 billion through other means was retained by the fund.

The fund created by former President Abdulla Yameen to settle the sovereign debt had exchanged their dollars to Maldivian Rufiyaa during the COVID-19 Pandemic. As a result, a large part of fund was in Maldivian Rufiyaa before the end of December last year. Exchanging all the rufiyaa in the fund to dollars is something the state intends to do under the “Week 14” plan.

SDF has invested 80 percent of the collected funds into T-bills.

According to the budget , this year will see SDF accumulate approximately MVR 1.2 billion.

The book also issues a protocol for MVR 3.8 billion to be set aside as various debt repayments from the money deposited to the fund.

While MVR 8.2 billion is set aside to repay the state debt in 2025, SDF also allocates an amount of 3.8 billion for debts. Moreover, 2026 sees a larger amount of 9.8 billion which requires to be paid off on debt. In addition to the 3.8 billion that is accessible to SDF for the repayment of selected dues, SDF plans to sell a bond or Sukuk (Sharia-compliant bonds used in Islamic finance) to refinance the debits.

The government aims to amass an amount of MVR 9.7 billion by the end of the year. While the repayment of the national debt uses a large fund from the SDF in the years 2025 and 2026, the current sovereign debts stands at an alarming MVR 120 billion.