Thursday 25th Jul 2024
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State Debt

Government borrows USD 100 million from India

The government of Maldives has issued a bond of USD 100 million to the State Bank of India in the Maldives.
This is the second loan acquired from India after the Government of Maldives made a public statement about abstinence from additional debt acquisition.

According to the Ministry of Finance, the first USD 100 million was borrowed to hasten the progress of ongoing developmental projects.

The Government of India handed over the loan to Maldives at a ceremony held at the Ministry of Finance, where it was accepted by the Minister of Foreign Affairs Abdulla Shahid and the Minister of Finance Ibraim Ameer. The document was handed over by the Indian High Commissioner for the Maldives Munu Mahawar.

Notably, debt acquired through the Indian government is the most debt acquired from a single nation over the last four years. The government described these borrowings as financial assistance.

Speaking at the ceremony, Minister Shahid stated that the USD 100 million provided by the Government of India was proof that the international scene accepts the foreign policies adopted by the President Ibrahim Mohamed Solih’s government.

Minister Ameer described the loan amount as “investment security” for the projects in Maldives that are entrusted to India.

A treasury bill or t-bill, sold as budgetary support, is a short-term investment instrument issued by the government, where the longer the maturity date, the higher the interest rate climbs.

Senior officials of the government tried to describe the USD 100 million bond as a grant aid from India even though it is a short term loan that has to be repaid at a high interest rate.