Government repays $50 million loan to India

The Maldivian government has repaid a $50 million loan to India, which was obtained by former President Mohamed Nasheed’s government as treasury bonds,which expired yesterday, from State Bank of India.

A total of $100 million (MVR1.5 billion) was loaned by the former government through treasury bonds.

An official of Ministry of Finance told Sun Online today in an interview that the payment for the treasury bonds worth $50 million (MVR771 million) was made yesterday following a notification sent by the bank in this regard.

An official of the Indian High Commission told Sun Online that the $50 million treasury bonds actually expired on 3 December 2011, and that the duration was extended by one year until 3 December 2012 following a request by the Maldivian government.

Finance Minister Abdullah Jihad said recently that refusal by the Indian government to further extend the repayment period would mean that reserves have to be utilised to repay the total $100 million.

“Problems will arise if the reserves decline. This has been noted by IMF as well. India has said that further rollover is not possible,” he said.

The government would have to pay the remaining $50 million to India in February.

Statistics revealed by the Maldives Monetary Authority (MMA) show that at the end of last month, the state reserves held MVR5.4 billion. An IMF mission which visited the Maldives last month said that the country’s balance of payments position and state reserves were declining, and that the current reserves hold sufficient funds to import goods only for a duration of one and a half months.