India Rolls Over INR 3,000-Crore Currency Swap Facility to Maldives

India has approved the rollover of a 3000 crore currency swap facility to the Maldives, extending financial support to the island nation as it grapples with mounting external debt obligations, foreign exchange pressures and uncertainty over tourism earnings. The decision reinforces New Delhi's commitment to supporting the financial stability of its neighbour while deepening bilateral economic and maritime cooperation.

The Government of India approved the Maldives request to roll over the INR 30 billion facility under the SAARC Currency Swap Framework for 2024 to 2027, the Indian High Commission said in a press release. The arrangement was signed between the Reserve Bank of India and the Maldives Monetary Authority during President Mohamed Muizzus state visit to India in October 2024. The first drawdown was extended on April 23, 2026. Since the framework was introduced in 2012, the RBI has provided more than 1.1 billion US dollars in aggregate currency swap support to the Maldives.

The rollover comes as the Maldives faces significant financial challenges. According to the World Bank, public and publicly guaranteed debt reached an estimated 129.7 percent of GDP in 2025, while external debt service requirements were projected at 1.7 billion US dollars in 2026. Foreign exchange reserves declined from 1.3 billion US dollars in March to 717.9 million US dollars in April 2026 following major repayments. The World Bank also projected the current account deficit to widen to 20.6 percent of GDP this year, citing weaker tourism receipts and higher import costs.

Beyond the currency swap, India has supported the Maldives through Treasury securities. It subscribed to two long term Treasury bonds worth 250 million US dollars and 100 million US dollars, along with three Treasury bills totalling 150 million US dollars, which have been settled by the Maldives. The Indian government also paid 42.8 million US dollars towards interest incurred, according to the press release.

Tourism remains central to the Maldivian economy, generating foreign exchange, employment and government revenue. The country recorded approximately 2.25 million tourist arrivals in 2025, an increase of 9.8 percent from the previous year.

India has also supported tourism connectivity through the 128.9 million US dollar Hanimaadhoo International Airport redevelopment, inaugurated in November 2025, and the 29.11 million US dollar Gan International Airport project. The 500 million US dollar Greater Male Connectivity Project, comprising a 400 million US dollar Indian line of credit and a 100 million US dollar grant, aims to strengthen transport links and economic activity.

The partnership aligns with Indias Neighbourhood First policy and MAHASAGAR vision. While the rollover provides short term financial breathing room, sustainable stability will depend on stronger tourism earnings, responsible debt management and fiscal reforms.