Govt: Swap facility extension a reflection of close ties between India and Maldives

The Maldivian government, on Friday, described the extension of the INR 30 billion currency swap facility between the Maldives Monetary Authority (MMA) and the Reserve Bank of India (RBI) as a reflection of the close bilateral ties between the two countries.

The High Commission of India in the Maldives announced the extension of the facility today, which was extended to support the Maldivian government and its people in addressing financial challenges.

In a statement following the decision, the Maldivian Foreign Ministry said the extension underscored the longstanding relationship between the Maldives and India. The government also expressed its sincere gratitude to India for its continued assistance and cooperation.

The Foreign Ministry stated that, under the leadership of President Dr. Mohamed Muizzu, the administration remains committed to strengthening ties with key bilateral partners, including India, and expanding cooperation in areas of mutual benefit.

Furthermore, the Ministry acknowledged India’s support through Prime Minister Narendra Modi’s ‘Neighborhood First’ policy. It reaffirmed the government’s commitment to further strengthening the historic relationship for the benefit and well-being of the people of both countries.

According to the Indian High Commission, the facility was arranged under an agreement signed during President Muizzu’s state visit to India in October 2024, under the special currency swap framework for SAARC countries. The first tranche of the INR 30 billion facility was disbursed to the Maldives on April 23 under the agreement.

The INR currency swap arrangement, established under the 2024–2027 framework, provides significant concessions in interest rates and other terms. The High Commission noted that since the framework was introduced in 2012, India’s central bank has extended more than USD 1.1 billion in currency swap assistance to the Maldives.

Additionally, India has purchased two long-term treasury bonds worth USD 250 million and USD 100 million, respectively. Although the Maldives has repaid three treasury bills (T-bills) worth a total of USD 150 million that were previously purchased by India, the Indian government covered USD 42.8 million in accrued interest. The High Commission emphasized that these currency swap facilities, treasury bonds (T-bonds), and T-bills have played a crucial role in maintaining financial stability in the Maldives.