The country's total state debt is projected to reach MVR 129 billion this year. The state will face significant financial obligations for debt repayment over the next two years.
The Indian government is prepared to support the Maldives to alleviate its financial challenges, Indian media reports citing an anonymous official.
An Indian official speaking to The Economic Times on condition of anonymity, said that the Maldives could immediately access USD 400 million through the Reserve Bank of India’s currency swap program in addition to seeking long-term loans from a USD 800 million line of credit extended to the Maldives government in 2019.
It remains unclear whether the Maldives has officially requested this assistance. However, the issue is expected to be discussed during President Dr Mohamed Muizzu's upcoming visit to India.
Central Bank, Maldives Monetary Authority (MMA) is working to secure a USD 400 million currency swap facility to bolster the country's foreign exchange reserves.
International media reports suggest that there is concern about the Maldives potentially defaulting on its Sukuk payments due to declining reserves. Financial experts have raised worries about the possibility of difficulties in meeting the Sukuk coupon payment next month. Despite these concerns, Finance Minister Dr Mohamed Shafeeq has assured that there is no issue with paying the USD 25 million due on October 8.
Maldives reserves currently total USD 444 million, with usable reserves at USD 61 million, which covers approximately one month of imports.
The country's total State debt is projected to reach MVR 129 billion this year. The State will face significant financial obligations for debt repayment over the next two years.
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