Govt repays USD 100 mil loan with USD 26 mil interest

The current government has repaid a previously acquired USD 100 million loan with a USD 26 million interest. The loan had been acquired during the former administration.

The loan in question, had been borrowed from Cargill Financial Services International, a United States agency that offers trade finance and risk mitigation services. According to the Ministry of Finance, the loan was acquired on March 24, 2022 as budget support and cash injections to commercial and tourism initiatives.

The loan facility was acquired at an interest rate of 7.15 percent, with enforced March 24, 2025 scheduled as the repayment deadline.

With this repayment, the Maldives government has paid MVR 1.94 billion in local currency (inclusive of the USD 100 million loan facility and the USD 26 million interest).

The Ministry of Finance confirmed to ‘Sun’ online about repaying this loan to its lender, and amid growing concerns about the Maldivian government’s financial capacity for debt servicing.

Meanwhile, former President Mohamed Nasheed had claimed Maldives owed USD 150 million in repayments to external lenders as of March this year while an additional USD 25 million must be earmarked for repayment in April.

The Maldives state is required to pay a total of USD 800 million this year for external debts; which translates to MVR 12-13 billion.

In a bid to increase financial health, the government announced decision sell a Housing Development Corporation (HDC) plot to Maldives Monetary Authority (MMA) – the central bank – for MVR 15 billion. With this the current administration, which came to power with its anti-overdraft or money-printing policies, has attracted significant criticism from the public and political opposition.

While the opposition suspect the true motive behind this massive land-sale, claiming the proceedings would likely be used for the government’s needs; several economic experts claim the decision could adversely impact the value of Maldivian Rufiyaa, which could subsequently boost black market exchange rate on US dollars.