Maldivian President Mohamed Muizzu announced that his government has repaid the second tranche of loans taken from India.
Muizzu said, “We have fully repaid the second Treasury Bill worth $50 million (around ₹425 crore) to India as part of our financial commitments.” Earlier, in January 2024, the Maldives government had also repaid another Treasury Bill worth $50 million.
President Muizzu said that another Treasury Bill worth $50 million is due in September, and its repayment is still pending.
In 2019, the government led by former President Ibrahim Mohamed Solih sought financial help from India to manage the country’s growing budget deficit and economic needs. During that period, State Bank of India purchased Treasury Bills issued by the Maldives government. India provided this support to help the Maldives during financial difficulties.
How Treasury Bills help countries financially?
Treasury Bills are short-term loans taken from other countries that must be repaid within a fixed time period.
Treasury Bills help governments raise money for short-term financial needs. In 2019, the Maldives government needed financial support to manage its budget deficit and other economic expenses.
To raise money, the government issued Treasury Bills, which were purchased by State Bank of India. By buying these Treasury Bills, SBI gave immediate funds to the Maldives government.
The government then used this money for important expenses such as development projects, salaries, imports, and debt payments. After a fixed period, the Maldives government repaid the amount to SBI. In this way, Treasury Bills work like a short-term loan and help governments manage financial difficulties.
Muizzu accused the previous government of not repaying the Treasury Bills on time and instead extending the debt every year by issuing new bills. He said his government has now started repaying these pending loans, which will help reduce the country’s foreign debt burden of around $150 million (approximately ₹1,275 crore).
India has been supporting the Maldives economically for many years. During financial crises, India has often extended the repayment period of these Treasury Bills to provide relief to the Maldives.
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