The Sovereign Development Fund, launched by former President Abdulla Yameen Abdul Qayyoom during his administration to contribute toward national debt repayment and states of emergencies, has been completely exhausted of its US Dollars.
According to the data shared by the Ministry of Finance on TMJ’s request, the Sovereign Development Fund held no US Dollars at the end of 2020
The ministry revealed that President Ibrahim Mohamed Solih’s administration emptied out the fund’s USD account by the end of 2020 and had not deposited any amount in USD ever since.
The former administration’s plans for the fund were threefold; to use the fund in economic emergencies, to repay loans taken for developmental projects and to use it as collateral when securing loans and investments.
The fund collected a portion of the Airport Development charge (ADC) collected from every traveler at Velana International Airport in addition to a portion of other service charges. USD 25 is levied as ADC from each foreign traveler and USD 12 is levied from local travelers.
Although these charges are being levied under the approved regulations, the government deposits to the funds in Maldivian Rufiyaa after exchanging collected US Dollars. It is speculated that adding MVR instead of USD proves the purpose of the fund to be misplaced.
Moody’s Investors Relations had expressed concerns about how the fund was being used. Moody’s reported that Maldives will eventually face hardships in repaying loans acquired from international lenders.
According to the finance ministry’s reports, SDF held MVR 1.6 billion by September 15, 2022. However, as the state continues to print money to add to the federal reserve, irrelevant of the amount of local currency present in SDF, it can no longer be directed towards international loan repayments.