President Dr. Mohamed Muizzu has announced that following the implementation of robust policies to deposit US dollars into the Sovereign Development Fund (SDF), the fund's balance has now exceeded USD 275 million.
Delivering the Presidential Address, President Dr Mohamed Muizzu stated that upon assuming office, the most significant financial challenge was the obligation to repay a USD 500 million sukuk issued by the previous administration in 2021 at a higher cost. This sukuk was issued to settle a USD 250 million bond originally taken from the international debt capital market in 2017. The President further highlighted that the IMF’s Article IV report on the Maldives' economic situation, dated November 23, 2022, categorized the country as being at 'high risk of debt distress,' which presented an additional major challenge.
The President emphasised that from the very first day of this administration, meticulous preparations have been underway to ensure the timely repayment of the sukuk. He also noted that these proactive measures have led to a substantial increase in the US dollar reserves held within the Sovereign Development Fund.
"In this regard, due to the measures taken under the current administration's policy to increase dollar deposits into the Sovereign Development Fund, the fund now exceeds USD 275 million. However, when this administration assumed office, the usable liquidity in the SDF stood at a mere USD 2 million. Credit rating agencies are now acknowledging the improved foreign currency liquidity of the SDF since the current administration took over. Furthermore, the cost of financing for these transactions during the previous two administrations reached double digits, rising as high as 10.5 percent," the President stated.
The President further noted that the USD 150 million Sukuk repayment due in April this year is planned to be settled using the foreign currency accumulated in the SDF. He provided assurance that after repaying a portion of this Sukuk, the interest rate for refinancing the remaining balance will not exceed 9 [percent, contrasting this with the irresponsible financial practices of previous administrations.
Delivering the Presidential Address, the President also emphasised that the government's objective is to liberate the Maldives from the heavy debt trap inherited from the previous administration and to transform the nation into a financially empowered country.