Maldives repays final $50 million of India's SBI treasury bills

The Maldives has repaid the final USD 50 million of USD 150 million in Treasury bills held by the State Bank of India (SBI), completing repayment of the amount, the Ministry of Finance and Public Enterprises said on Thursday.

The ministry said the payment would not affect the country’s ability to obtain foreign currency required to import medicines, food, fuel and other essential goods.

The USD 150 million was provided as budget support during former President Ibrahim Mohamed Solih’s administration through Treasury bills subscribed by SBI, with the support of the Indian government. Repayment of the amount had previously been deferred on several occasions.

According to the Finance Ministry, the full USD 150 million has now been repaid in three instalments.

The first USD 50 million was repaid in 2024, while a second USD 50 million was settled in May this year. The remaining USD 50 million, which matured on Thursday, was also paid on schedule.

Citing statistics from the Maldives Monetary Authority (MMA), the ministry said the country’s official reserves stood at about USD 644 million at the end of August.

“At the same time, the government has made arrangements to ensure the uninterrupted availability of foreign currency required to import essential goods such as fuel, food items and medical supplies,” the ministry said.

The ministry rejected claims that the debt repayment could create difficulties in financing essential imports, saying there was no basis for such concerns.

The statement followed concerns over the effect the USD 50 million payment could have on the country’s foreign currency position. Former President Mohamed Nasheed had warned ahead of the repayment that it could reduce the MMA’s usable reserves and affect the availability of foreign currency for essential imports. Latest MMA figures cited in reports showed usable reserves at USD 200.6 million at the end of August.

The Finance Ministry said the government had been preparing for upcoming debt repayments by depositing funds into the Sovereign Development Fund and making other arrangements required to meet its obligations.

It said the government’s objective was to maintain economic growth, strengthen reserves and ensure that the basic needs of the public continued to be met.

The ministry also said discussions had been held in recent days with international financial institutions, bilateral partners and other organisations supporting the Maldives. It said it expected the country’s reserve position to strengthen as those discussions progressed.

The USD 150 million in Treasury bills was part of financial support extended through SBI. The Indian government covered the interest payments on USD 100 million of the Treasury bills, according to the Finance Ministry.

India had also previously written off USD 50 million from USD 200 million extended to the Maldives through SBI in 2019, according to the ministry.

The repayment comes as the government seeks additional foreign currency financing. Malaysia has agreed in principle to work towards a USD 100 million currency swap facility for the Maldives through the two countries’ central banks.