The world's largest investment bank, JPMorgan, has not officially announced that the Maldives would go bankrupt, the Finance Ministry has said.
Several foreign news agencies published reports based on an analysis by JP Morgan, which states that the Maldives' reserves could run out by 2023. The information was provided by an economist at the bank.
When local news agencies reported the matter, the Finance Ministry was quick to hold a press conference. During the news conference held Wednesday, Finance Minister Ibrahim Ameer said JPMorgan had not officially announced that the Maldives would go bankrupt. He said the government spoke to JPMorgan regarding the report, and the bank had relayed that it had not issued any such report in an official capacity.
"Even they [JPMorgan] would have different departments. One of these [departments] made this statement. But there is no official report saying that the Maldives would go bankrupt. It is simply a statement given by one of their researchers in an interview with a foreign newspaper. Another person may review it differently," Ameer said.
The minister added that JPMorgan is a bank that works closely with the Maldives and was also involved in the sale of Sukuk last year.
"[JPMorgan] is one of the parties that acted as the lead arranger in Sukuk insurance. They acted as a lead arranger as they had confidence [in us] given our growth story and the pace of the economy. The Sukuk sold last year was one of the most successful on the market at the time. We targeted $200 million. But the subscription got $600 million."
According to a report by JPMorgan, Russia's attacks on Ukraine will have an adverse impact on the economies of developing countries. This threatens to reduce interest rates on foreign debt. JP Morgan said the countries with the highest debt would be the worst affected.
The bank has also released a list of countries at risk of default, as was the case with Sri Lanka. The bank said 52 countries were at risk of defaulting. Eight countries could run out of reserves by 2023 and face debt defaults.
Maldives will not go into debt default
Finance Minister Ameer said the Maldives and Sri Lanka could not be compared with each other, and that all economic activities of the Maldives were going strong. Ameer assured that the Maldives would not succumb to s state where it would go into debt default.
"There is no debt service [debt repayment] risk in the Maldives. The risk was highest last year. That is the $250 million bond due in June this year. We have already paid $182 million from Sukuk Insurance. We will pay $62 million with interest in June this year. We already have the fund," said the minister.
According to statistics publicized by the Finance Ministry, the Maldives' reserves stood at $865 million as of March. The total debt up to that period was MVR 94 billion. This is 122 percent of the GDP.
