The Maldives Monetary Authority (MMA) has advised the government to fast-track the sale of sukuk or bonds and restructure state expenditure to meet next year’s record debt obligations.
The government has proposed a record budget of MVR 64.2 billion for 2026, an increase of MVR 7.6 billion compared to this year’s MVR 56.6 billion budget.
Debt repayments alone will cost USD 1.1 billion next year, including a one-off payment of USD 600 million due in April.
The Parliament’s Budget Review Committee summoned MMA officials on Saturday to discuss the matter. During the meeting, MMA Managing Director Mariyam Rashfa recommended accelerating the issuance of a new sukuk or bond to cover the USD 600 million payment.
She also advised that airport development fees be collected and deposited into the Sovereign Development Fund (SDF) to ensure the repayment plan stays on track. Rashfa stressed that SDF funds should not be diverted to finance the budget, and that if external financing is unavailable, the government should turn to the domestic market.
“I recommend that external financing be prioritized to pay off the USD 600 million debt. If the proposed amount cannot be secured, I recommend reprioritizing expenditures and reducing the financing requirement,” said Rashfa.
President Dr. Mohamed Muizzu has stated that he is not concerned about the sukuk repayment.
Debt concerns have intensified this year, with repayments exceeding budgeted amounts. While MVR 3.88 billion was allocated for debt servicing, MVR 4.44 billion was spent.
The government has already announced plans to sell sukuk or bonds to meet next year’s obligations. However, former Presidents Abdulla Yameen Abdul Gayoom and Mohamed Nasheed have warned that the country’s economic situation could erode investor confidence and risk default.
Their remarks followed credit rating downgrades by Fitch and Moody’s, the world’s two largest rating agencies.
Despite these warnings, the government has repeatedly expressed confidence in its ability to repay the debt.