Finance Minister Ibrahim Ameer has hit back at the issue of Maldives nearing bankruptcy, stating that talk of bankruptcy would cause more harm, than good.
His statement directly contradicts the warning bell issued by JPMorgan. US-based investment bank JP Morgan has listed Maldives as facing critical risk, anticipating that the country could exhaust foreign reserves and could default by the end of 2023.
A similar warning was issued by ex-CEO of Bank of Maldives (BML). Tim Sawyer in his resignation had warned of impending shock to the country, adding that the Maldives might have to face a situation like the one faced by neighboring Sri Lanka.
In a series of tweets posted in Dhivehi, late on Sunday evening, Minister Ameer denied these warnings. Minister Ameer said the dollar situation in the country was improving and, as a result of that, reserves would revert back to pre-covid levels. Hence, as per Minister Ameer, Maldives would not have any issues paying back loans and no challenges to the economy in the short term.
Attached with the tweets were graphics showing gross and net reserves. However, none of the graphs show the usable reserves.
The Minister went on to add that he was keeping a close watch over dollar inflows and outflows, and will implement any measures necessary. The rumors of bankruptcy, he said, were misconstruction and brought in more harm.
Minister Ameer admitted that there were multiple stressors on the economy, including the global recession, but said the administration would be quick to react when the situation demanded. He pointed out that to address price hikes in fuel, and resultant increases in subsidy expenses on fuel and electricity, the government had increased loan limit taken from Islamic Trade Finance Corporation. The limit was increased to MVR 2.6 billion (US$ 175 million).
Ameer said the government seeks to provide all services with no disruptions, and as such, would seek to restructure budget financing.