The Minister of Finance and Planning, Moosa Zameer has revealed that two multilateral international agencies have agreed to facilitate USD 100 million financing facility, in response to the increased cost of oil importation due to the ongoing Middle East conflict.
The Minister made the remarks while speaking at a press conference held by the Special Cabinet Committee set up by the President in response to developments in the Middle East and assess their possible negative impacts on Maldives’ security and economic stability. Minister Zameer said the government is working closely with the Maldives Monetary Authority's (MMA) Governor in monitoring the nation’s financial reserve during this conflict and that all monetary measures taken by the administration are done so with meticulous considerations.
Oil prices have been rising significantly in international markets due to the ongoing conflict. Government noted that this has an adverse impact on Maldives as well. The Finance Minister said the government is working to raise an additional USD 100 million to mitigate the damage caused by rising oil prices. He revealed that an agreement has been reached with two international agencies in this regard.
“One step is to raise an additional USD 100 million for the reserves. An agreement was reached yesterday with two international multilateral agencies. That is the amount for oil prices that are going up now. For example, if something that used to cost USD 100 rises to USD 150, the arranged facility will offset the rise in price,” Minister Zameer stated.
The Minister said the matter is now in the final stages and the matter has been sent for final approval to the President.
The Minister also revealed that they are forecasting total damage to the economy due to the ongoing conflict. As such, if the conflict drags on for a month, the total damage to revenue could be USD 100 million, the Minister said.
“"If this war continues for a month, we are estimating a revenue decline of between USD 80 million and USD 100 million. That's direct government revenue. That is estimated by our technical team, and the World Bank has said that it is an accurate forecast. So, we must find a financing mechanism to compensate this damage,” Minister said.
The government is working on mitigating the negative implications of the Middle East war. With the outbreak of the war, the Middle Eastern airports where many tourists transit to Maldives have been closed. Subsequently, the number of tourist arrivals has seen a drop from previous numbers averaging 3,000.