INDIA HELPED MALDIVES AMID POTENTIAL THREAT SUKUK DEFAULT
India has extended its financial help to the island nation Maldives which is suffering from an economic crisis. Followed up by a request by the Maldives government because of the growing debt crisis and first-ever Islamic sovereign bond default – the Maldives sukuk 2026, the Indian high commission announced on Thursday, 19 September 2024, that the state government will roll over USD 50 million treasury bill for another year.
“At the request of the Government of Maldives, the State Bank of India (SBI) has subscribed to the USD 50 million (approximately Rs 417 crore) Government Treasury Bill (T-bills) issued by the Ministry of Finance of Maldives, for a period of one more year from the date of maturity of the previous subscription, September 19, 2024.” the statement says.
SBI has purchased Treasury Bills worth a total of USD 200 million, buying four bills at USD 50 million each. This deal was made under an agreement from the previous government, according to the Adhadhu news portal.
The Treasury Bills were renewed every year, with the Indian government paying interest on them. Nonetheless, the Government of President Mohammed Miuizzu has repaid USD 50 earlier in January.
“Sincere gratitude to External Affairs Minister @DrSJaishankar and the Government of #India for extending crucial budgetary support to the Maldives with the rollover of USD 50 million Treasury Bill. This generous gesture reflects the enduring bonds of friendship between #Maldives and #India,” foreign minister Moosa Zameer posted on X.
INDIA – MALDIVES TIES:
Financial aid to Maldives is the latest example of India making efforts to renew the economic ties with their Neighbour which has shifted towards China after the election victory of President Mohamed Muizzu in April.
After his oath of presidency, he ordered the withdrawal of Indian military personnel manning three aviation platforms gifted by India to the Maldives. After some talks, the military men were replaced by civilians.
Unlike his predecessor, he visited Turkey and China first after his oath. He later visited Delhi on June 9 to attend Prime Minister Narendra Modi’s swearing ceremony.
Maldives debt detail:
Maldives is under the debt of various countries including China, which he tries to repay very soon.
Much of the debt Maldives owes is to China and India, USD 1.37 billion and USD 124 million respectively as loans, data shown by world bank.
China , which is Maldives biggest lender and to whom Maldives owes the most, agreed last week to strengthen more trade and investment with the country, giving hope to the country to curtail its crisis.
Maldives reserves currently stand at USD 444 million, with usable reserves at USD 61 million.
