President says Sukuk refinancing will not exceed 9% interest

President Mohamed Muizzu said on Thursday that the loan to repay the Maldives’ USD 500 million Sukuk due this year will be secured at an interest rate not exceeding 9 per cent.

The President made the remarks while delivering his presidential address to People’s Majlis, amid reports that the government had been in discussions to obtain financing at higher interest rates.

President Muizzu said the government would not borrow under terms that place an excessive burden on public finances. He outlined the plan to settle the USD 500 million Sukuk, stating that USD 150 million due in April will be paid using foreign currency held in the Sovereign Development Fund (SDF). The remaining USD 350 million will be refinanced or settled through additional borrowing.

“I can assure the people of the Maldives and Members of Parliament that the interest rate on any borrowing undertaken by this government will not exceed 9 per cent,” the President said.

He said the balance of foreign currency held in the SDF has increased to USD 275 million. At the end of the previous administration, the fund held USD 2 million, according to the President.

President Muizzu also said the government has taken steps to strengthen foreign currency reserves. He said that as of December last year, USD 492 million had been deposited with the Maldives Monetary Authority.

According to the President, official foreign exchange reserves have reached USD 1.3 billion.

He added that, in addition to tax revenue, the current budget has secured USD 100 million, which is expected to be collected within 45 days. He said a further USD 150 million is being raised from external sources.