The Minister of Finance and Planning, Moosa Zameer expressed optimism by saying that investors are fully confident on Maldives’ ability to meet its debt obligations, due to the measures implemented under the leadership of President Dr Mohamed Muizzu. This is the result of two years of disciplined deliberate efforts made by the president, he added.
The previous administration issued a USD 500 million sukuk 2021. The interest payment on the sukuk has to be made with two tranches of USD 25 million each, a total of USD 50 million per year. A relatively large amount—USD 603.1 million—has been specifically included for the repayment of the bond this year.
One of the most pressing issues discussed when the current administration came into office, was the state’s ability to repay the immense debt obligation and avoid bankruptcy. This rhetoric was also reflected in various reports from different financial bodies. Minister Zameer pointed at these facts and said that over the last two years, many have doubted the government’s ability to navigate past the risk of bankruptcy.
The minister also said that the value of the bond issued by the government was significantly devalued due to the bankruptcy risks. Reflecting this statement was a report from finance ministry that showed that the value of the sukuk was 64 cents per USD 1. Government measures to prioritise timely debt repayment led to the sukuk value appreciating, the minister noted. The minister also pointed out the fact the previous administration sold the sukuk at a very high interest rate and that the current administrations efforts to repay these debt obligations on a timely manner have shored up investor confidence.
The sukuk is currently valued and holding at an average USD 90. The government has planned and budgeted for the sukuk repayment in 2026, and according to the minister, work is currently being carried out to ensure the timely repayment of this debt obligation.