India is prepared to provide financial assistance to help the Maldives navigate its current economic difficulties, according to Indian media reports citing an anonymous government official.
Speaking to The Economic Times, the official revealed that the Maldives could access USD 400 million immediately through the Reserve Bank of India’s currency swap program. Additionally, the Maldives could seek long-term loans from a USD 800 million line of credit extended to the government in 2019.
While it is not yet confirmed whether the Maldives has formally requested this support, discussions are expected during President Dr. Mohamed Muizzu's upcoming visit to India.
Maldives Monetary Authority (MMA), the country's central bank, is currently negotiating a USD 400 million currency swap facility to strengthen its foreign exchange reserves.
There have been concerns in the international financial community regarding the possibility of the Maldives defaulting on its Sukuk payments due to shrinking reserves. Experts fear challenges in meeting a Sukuk coupon payment scheduled for next month. However, Finance Minister Dr. Mohamed Shafeeq has reassured that the Maldives will be able to meet the USD 25 million payment due on October 8.
As of now, the country’s total reserves stand at USD 444 million, with usable reserves at USD 61 million, covering about one month’s worth of imports. Meanwhile, the Maldives’ total state debt is projected to reach MVR 129 billion by the end of this year, with significant debt repayment obligations looming over the next two years.
