The Maldives Pension Administration Office (MPAO) has said the USD 156 million treasury bonds to be invested by the government will be invested in a manner that is not detrimental to the Pension Fund.
A statement issued by MPAO said the investment follows their risk-managed long-term investment strategy. The bonds will help create a foreign currency reserve within the pension fund without the need to purchase foreign currency from the market.
MPAO said the investment will be structured such that returns can be received in both local and foreign currency. Funding for the investment will come from the secondary market sale of treasury bonds worth USD 156 million previously purchased by the Maldives Retirement Pension Scheme, taking into account the Pension Fund's liquidity position. According to MPAO, this approach will not harm the pension fund, even though it involves the sale of some existing bonds in the secondary market. MPAO further said the decision follows the advice of investment consultants and aligns with the long-term investment strategy of the Maldives Retirement Pension Scheme.
The statement further said the investment will generate dollar-denominated returns, extend the average duration of the fund’s assets, and increase overall portfolio returns. It will also allow older bonds to be shifted to long-term investments with better returns.
The office stressed that it is acting in the best interests of pension fund members, and in line with the Pension Act and regulations.