India Extends \$50 Million Financial Support to Maldives Amid Debt Crisis

International International News

Posted by NewAdmin on 2025-05-12 11:45:01 |

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India has extended crucial financial support to the Maldives by rolling over its subscription to a $50 million treasury bill for another year. This decision, made at the request of the Maldivian government, highlights India's ongoing commitment to supporting its neighboring country, particularly amidst its economic challenges. The State Bank of India, as part of this support, renewed its subscription to the bill issued by the Maldives' Ministry of Finance. The Indian High Commission in the Maldives made the announcement on its official social media platform.

The financial assistance was publicly acknowledged by the Maldives' Foreign Minister Abdulla Khaleel, who expressed gratitude for India's timely intervention. He emphasized that this financial aid is a crucial component in helping the Maldives carry out necessary fiscal reforms aimed at strengthening the country’s economic resilience. The assistance further underscores the close relationship between India and the Maldives, especially in the context of the archipelago's current economic struggles.

The Maldives' economy is grappling with a substantial external debt, which has raised concerns over its ability to avoid a default. The country’s total public and publicly guaranteed debt reached a staggering $9.4 billion, or over 134% of its GDP, by the end of 2024. This represents a significant rise in debt compared to the previous year. The situation has been worsened by downgrades from major credit rating agencies like Fitch and Moody's, making it even more difficult for the Maldives to access new financing from international markets.

China and India are the two largest creditors to the Maldives, and both nations are vying for strategic influence over the island nation located in the Indian Ocean. With the Maldivian government facing mounting debt servicing obligations in 2025 and 2026, the support from India is seen as an important gesture of solidarity during a challenging economic period.

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