Maldives announces sale of MVR 4 billion in T-bills to manage cashflow

The Maldivian government has announced the sale of over MVR 4 billion in T-bills as it seeks to manage its cashflow.

According to an announcement by the Finance Ministry last week, the government is selling four T-bills worth total MVR 4.27 billion.

The T-bills up for subscription are:

• MVR 1.97 billion T-bill which matures in 28 days with an interest rate of 3.50 percent
• MVR 172 million T-bill which matures in 98 days with an interest rate of 3.87 percent
• MVR 830 million T-bill which matures in 182 days with an interest rate of 4.23 percent
• MVR 1.29 billion T-bill which matures in 364 days with an interest rate of 4.60 percent

The bills will be sold on Sunday and must be settled by the next day.

T-bills are a financial instrument sold by central banks to meet government budget financing requirements with a fixed interest rate and a maturity period of one year or less. T-bills are usually bought by banks that operate in Maldives, the pension office, state-owned enterprises, and some private companies.

Maldivian government currently has MVR 85.3 billion in outstanding securities.

Maldives has an external debt service obligation of about USD 600 million due in 2025, and more than USD 1 billion in 2026 – including a USD 500 million sukuk. Top rating agencies Moody’s and Fitch have both downgraded Maldives’ credit rating citing risk of default.

According to the World Bank, the Maldives' total public and publicly guaranteed debt stood at USD 8.2 billion, or equivalent to 116 percent of GDP, in the first quarter of this year.

But despite the concerns, the Maldivian administration has provided assurance it will honor its debt obligations to creditors and investors.

The administration has also announced economic reforms to alleviate the situation, including reducing the number of political appointees and raising taxes.