Finance Minister Dr. Mohamed Shafeeq has stated that while the Maldives is currently facing difficulties in repaying its debts, including a substantial one-time Sukuk payment due in 2026, there is growing confidence that the country will be able to meet these obligations.
In an interview with AVAS, Minister Shafeeq said the next upcoming significant payment is a coupon payment of US$25 million, due before October 8. He expressed confidence that the payment will be made on time.
Shafeeq noted that while the second coupon payment for a US$500 million bond issued in 2021 is a priority, the larger concern is the US$250 million lump sum due in 2026. While the first coupon payment was paid in April despite challenges, the October payment will also be paid similarly, and there will be no other sukuk payments due this year, he said. He expressed confidence that the October payment will boost the confidence of investors and the financial sector.
"We are focusing more on paying the large lump sum due in 2026 rather than the coupon payment because we have that assurance [that we can pay]," Shafeeq said.
The minister said the challenge of repaying the 2026 debt was due to a sukuk on terms of a lump sum payment. The current government will also take loans, but it will be done in such a way that payments are due in installments, he said.
According to the Central Bank, Maldives Monetary Authority (MMA), reserves currently stand at $395 million. Of this, $45 million is in usable reserves.
The minister said the government's top priority is to increase reserves to pay for the 2026 payment, noting that US$70 million had already been deposited in the Sovereign Development Fund (SDF) to facilitate the debt repayment. In addition to these funds, funds are also expected to be available from foreign financial institutions, he said. He expressed hope that the Maldives would be able to make the payments on time without defaulting with additional cost-cutting measures and new initiatives to diversify the economy.
According to MIRA figures, the revenue is expected to increase from this month. While it will also benefit the reserves, he said that a positive change has been brought to the reserves during the month.
"I understand that the MMA will release the latest reserve data before the 8th of this month. Then, we will know that the reserves are improving," he said.
The minister said the government's efforts to improve the economic situation in the Maldives are facing challenges due to misinformation published by reputable local and international news agencies.
"There are some such difficulties due to the spread of inaccurate information about the economy. But with the efforts of all of us, hopefully this difficulty can be overcome," Shafeeq said.
The government is also preparing to arrange a $400 million currency swap facility through the Central Bank of India or the Reserve Bank of India (RBI) and sell a refinancing green bond.
