Maldivian President Mohammed Muizzu thanked New Delhi for its assistance, which he said would boost Malé’s dwindling foreign exchange reserves.
The Union government on Monday extended $400 million “support” and a bilateral currency swap of Rs 3,000 crore to the Maldives.
The move aims to help the island nation boost its dwindling foreign exchange reserves.
This came after Maldives President Mohamed Muizzu, who is on a four-day visit to India, met Prime Minister Narendra Modi at the Hyderabad House in Delhi on Monday.
Between May and September, the State Bank of India renewed its subscription to $100 million worth of government treasury bills issued by the Maldives for another year at the Maldivian government’s request.
“This year, SBI did a rollover of 100 million dollars of the Treasury Bench of Maldives,” Modi said on Monday. “As per the needs of Maldives, a 400 million dollars and Rs 30 billion currency swap agreement was also signed.”
Maldives, which is heavily reliant on tourism, is burdened with an external debt estimated to be 110% of its gross domestic product while its foreign exchange reserves have dipped to $440 million.
This is not enough to cover more than six weeks of imports by the island nation and sparked fears that Malé could default on a $25 million payment on its $500 million outstanding sukuk debt in October.
Sukuk are Sharia-compliant financial bonds that are meant to serve as an alternative to conventional bonds, which are not considered permissible by Islamic law.
