Maldives seeks extra $100m to support reserves amid Middle East conflict

Finance Minister Moosa Zameer said on Thursday that the government is working to secure an additional $100 million to support the country’s foreign reserves.

The finance minister made the remarks at a press conference held by a cabinet committee formed to prepare responses to the economic impact of the conflict in the Middle East.

The committee was established to assess the possible effects of the conflict on the Maldives economy, including higher import costs and pressure on state reserves.

A journalist at the press conference asked about the level of reserves as the government faces higher fuel import costs and a $500 million repayment due in April under the country’s sovereign Sukuk.

Zameer said several steps are being taken to prevent the depletion of reserves. One of the steps includes securing $100 million through discussions with international agencies.

“Through discussions with two multilateral agencies, we reached an agreement yesterday. A formal request has now been sent to the President to obtain the approval required by the Maldivian government,” he said.

Zameer said the funds are intended to offset higher expenditure linked to rising fuel prices.

He did not provide details regarding the interest rate or repayment period of the funds.

Earlier this month, President Mohamed Muizzu said the government has the capacity to repay the $500 million Sukuk due in April even without securing new loans or refinancing.

According to the president, the Maldives currently holds about $650 million in reserves.

The reserves include:

If the Sukuk is repaid using the current reserves without additional financing, the remaining balance would fall to about $150 million.

Economists have said that such an amount would cover the Maldives’ import expenditure for about one month.