MVR 2.4mn left in budget for loan repayments by mid-year

The government has exhausted over 99 percent of the amount allocated in the 2025 budget for loan repayments by the end of the first week of August, leaving just MVR 2.4 million.

The government allocated MVR 3.873 billion for loan repayments in the 2025 state budget.

But according to the latest weekly fiscal development report released by the Financial Ministry on Thursday, the government has spent MVR 3.870 billion on loan repayments as of August 7. This leaves MVR 2.4 million for loan repayments for the remainder of the year.

The Maldives has racked up a staggering USD 9.4 billion or MVR 144.95 billion in debt obligations, with the debt-to-GDP ratio at 130 percent.

This includes USD 600 million or MVR 9.25 billion due this year and another USD 1 million due next year.

President Dr. Mohamed Muizzu’s administration has been negotiating with Maldives’ biggest lenders, India and China, to reschedule repayment.

Elected to office on a pledge to expel Indian troops from the Maldives, relations between Male’ and New Delhi had been strained in the early days of President Muizzu’s administration.

In contrast, relations between Male’ and Beijing had appeared stronger, with President Muizzu choosing China for his first state visit upon assuming office.

Speaking to reporters after concluding a state visit to China in January 2024, President Muizzu said that Maldives wasn’t any country’s backyard and that the country cannot be bullied just because its small – remarks that were widely believed to be directed at India.

But despite the earlier turmoil, officials from both Male’ and Delhi repeatedly expressed keenness to repairing relations, and engaged in several high-level visits, including two by President Muizzu himself.

While Beijing has not allowed any concessions on Maldives’ debt obligations to them, assistance by New Delhi, including a USD 400 million currency swap agreement signed between the Maldives Monetary Authority (MMA) and the Reserve Bank of India (RBI) back in October 2024 has also been crucial boosting Maldives’ foreign exchange (FX) reserves, thereby alleviating imminent external liquidity strains.

This followed an agreement to reduce Maldives’ annual debt obligations by 40 percent during a state visit by Indian Prime Minister Narendra Modi in July.