MVR 1 billion spent on loan repayments and interest in first two months

The state has spent over MVR 1 billion on loan repayments and financing and interest costs within the first two months of this year, according to the latest data available from the Finance Ministry.

The Maldives has a staggering USD 1.1 billion in debt repayments due this year, including a USD 500 million sukuk and another USD 100 million payment due in April.

According to the latest weekly fiscal developments report released by the Finance Ministry, the state spent MVR 636.1 million on loan repayments as of February 26. Another MVR 412.2 million has been spent on financing and interest costs for loans.

A huge chunk of this year’s budget is going towards servicing the country’s debt, with MVR 12.9 billion allocated for loan repayments, and MVR 5.5 billion for financing and interest costs.

The Maldives’ staggering debt obligations has sparked warnings from international financial agencies.

Citing default risks, Moody’s downgraded Maldives’ credit rating from CAA1 to CAA2, while Fitch downgraded the country’s credit rating from CCC+ to CC.

Meanwhile, the World Bank warned the situation makes it harder for the Maldives to secure foreign assistance to alleviate the crisis it faces.

Finance Minister Moosa Zameer has stated that the record-high MVR 64.2 billion annual budget this year is one that will save the Maldives from debt without burdening future generations.

But the current conflict in the Middle East increases economic uncertainty.

Addressing these concerns, President Dr. Mohamed Muizzu told reporters on Monday that the Maldives has enough funds shored up to easily make the block payment due in April.

Meanwhile, Economic Minister Mohamed Saeed also sought to reassure the public, telling reporters on Tuesday that the will not run out of fuel or gas, and will continue to have a steady supply of food staples, despite the disruption to global trade and shipping due to the escalation in the conflict in the Middle East.