Maldives Repays USD 50 Million Debt to India, Signals Push to Cut External Borrowing
The Maldives has repaid a USD 50 million treasury bill (T-bill) owed to India, President Mohamed Muizzu said on Monday, as part of efforts to reduce the country’s external debt burden.
The T-bill was originally issued in 2019 by the previous Maldivian government and subscribed by the State Bank of India (State Bank of India) under India’s financial assistance framework. Instead of being repaid at maturity, it was rolled over annually, helping the Maldives manage short-term fiscal and foreign exchange pressures.
Muizzu said his administration repaid one such USD 50 million T-bill in January 2024 and another on Monday, with a further repayment due in September. He claimed the move has helped reduce what he described as a USD 150 million debt burden carried forward from the previous government.
India has for years supported the Maldives through emergency financial assistance, including treasury bill subscriptions, currency swaps, and credit lines , designed to stabilise public finances during liquidity crunches. These instruments have often been rolled over to ease immediate repayment pressure while maintaining financial stability in the island nation.
India and the Maldives share a close strategic and economic relationship shaped by geography and maritime security interests in the Indian Ocean. India has historically been among the Maldives’ most important development partners, stepping in with financial and logistical assistance during economic stress and crises.
While bilateral ties have experienced political shifts depending on leadership in Malé, economic cooperation has remained steady. India’s support through instruments like T-bill subscriptions reflects its role as a key financial stabiliser for the Maldives, particularly during periods of fiscal strain.
The latest repayment marks a step toward fiscal consolidation by the Muizzu government, even as India continues to remain an important economic partner for the island nation.