Finance Minister Ibrahim Ameer has said that the country's reserves will not run out and default on loans. Minister Ameer said this in a tweet on the country's economic situation.
Recently, the public has been expressing concern about the country's economic situation after an economist at the international investment firm JPMorgan said the Maldives could exhaust its reserves by 2023.
Responding to the concerns, Minister Ameer posted a series of tweets explaining the country's current economic situation. Ameer said the official reserves would be maintained at pre-COVID-19 levels by the end of this year with increasing dollar inflows. The minister also assured that there were no long-term challenges in repaying the country's debt. The minister said the government had the ability to repay the debt, and the reserves would be at a good level this year.
Official reserves will be maintained at pre-COVID levels by the end of this year with increasing dollar inflows. There are no long-term challenges in repaying the debt. We can pay off debt. Reserves will be at a good level this year.Ibrahim Ameer | Minister of Finance
The minister said the country's gross and net reserves are higher than before. The government is closely monitoring foreign exchange inflows and outflows to maintain these standards, he added.
"We are addressing the challenges we face. The reserve will be healthy this year," he said.
The minister also shared some graphs showing statistics on the country's economy.
The minister said the rumors that the Maldives' reserves could run out and default on its loans are untrue. He said such speculations could confuse the people and foreign investors and cause unnecessary damage to the entire country at this critical time. He said such rumors could increase instability in the economy and adversely affect the market, he said.
"The economy is growing rapidly and will return to pre-COVID levels by the end of this year. This is the result of the vigilance of the people and businesses to manage the COVID-19 health and economic crisis after assessing the fiscal situation," he said.
The rumors that the country's reserves could run out and default are untrue. Such stories misrepresent the truth to the people and foreign investors. While the world is facing a critical time, the whole country may suffer unnecessarily [due to the speculations]. This could increase instability in the economy, and the market may be adversely affected.Ibrahim Ameer | Minister of Finance
The minister said that the fluctuating global economy and rising commodity prices in the global market would also affect the Maldives. He said such risks could only be overcome by taking appropriate measures at the right time, assuring that the government was monitoring the situation and taking action.
The minister added that electricity and fuel subsidies have increased due to rising commodity prices, especially oil prices. He said that the limit of ITFC's trade finance facility had been raised to USD 175 million to mitigate the impact on the reserves.
"Government revenue has also improved, but government expenditure has also increased. The government intends to reshape expenditure and refinance the budget so that services are not disrupted," said Ameer.
