India bore USD 45 million interest as Maldives clears USD 150 million facility: MEA

India absorbed nearly USD 45 million in interest payments over five years on a USD 150 million Treasury bill facility extended to the Maldives, even as Malé repaid the full principal amount, the Ministry of External Affairs (MEA) said on Friday.

MEA spokesperson Randhir Jaiswal said the facility, subscribed by the State Bank of India (SBI) in 2019, was extended six times to support the Maldivian government's finances. The final USD 50 million tranche was settled on September 17, completing repayment of the USD 150 million facility.

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"It may also be noted that while the principal amount of the Treasury bills was paid by the Government of Maldives, the interest payment of all the US dollars 150 million Treasury bills over the past five years was borne by the Government of India. The total amount paid by India in interest settlement was close to US dollars 45 million," Jaiswal said.

The MEA said the continued support through the Treasury bills was part of India's Neighbourhood First policy and its development partnership with the Maldives.

Jaiswal also confirmed the settlement of the final USD 50 million tranche of the SBI-subcribed facility.

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"The final tranche of US dollars 50 million Treasury bills, out of a total of US dollars 150 million subscribed by the State Bank of India with the Government of Maldives, has been successfully settled on 17th September 2024," Jaiswal said, adding that the bills had been subscribed since 2019 and extended six times.

India's financial support to the Maldives also includes an INR 30 billion currency swap facility aimed at supporting the country's financial system. SBI has separately subscribed to USD 350 million worth of Maldivian Treasury bonds, which mature between 2029 and 2030.

"India has also extended, as you know, an INR 30 billion currency swap facility to the Maldives to support the Maldivian financial system. In addition, the State Bank of India has also subscribed to US dollars 350 million worth of Treasury bonds which are valid till 2029 and 2030," said Jaiswal.

The MEA said India's engagement with the Maldives extends beyond financial support and includes development cooperation and supplies of essential goods.

"Now, apart from this financial cooperation, we also have several other engagements, development cooperation partnerships, including, you know, several supplies that we continue to do."

The comments came a day after the Maldivian Finance Ministry said the country had sufficient foreign exchange reserves to meet its debt obligations without disrupting imports of essential goods.

According to the ministry, the Maldives had official reserves of about USD 664 million at the end of August 2026. It said the government had continued to meet repayment obligations linked to the budget support facility secured by the previous administration.

"The current administration has continued to honour the debt obligations arising from this budget support financing facility, secured by the previous administration, on their respective due dates," the Maldivian Finance Ministry stated. "Accordingly, the first USD 50 million was repaid in January 2024, followed by a further USD 50 million on 11 May 2026. With today’s repayment of the remaining USD 50 million, which was due to mature on 17 September 2026, the Government has now fully repaid the entire USD 150 million facility obtained in 2019," it added.

The ministry also said arrangements were in place to ensure that foreign currency remained available for imports of fuel, food and medical supplies.

"The Government has also put in place the necessary arrangements to ensure the continued availability of foreign currency for the import of essential goods, including fuel, food items and medical supplies," the statement read.

"Safeguarding the uninterrupted supply of these essential goods and services remains a key priority of the Government. In this context, claims that the repayment of debt could constrain the importation of essential goods are unfounded," according to the statement.

The Maldivian government said it had been preparing for its debt obligations in advance, including by building funds through the Sovereign Development Fund.

"The Government’s objective is to sustain the economic development of the Maldives, strengthen the country’s foreign exchange reserves, and safeguard the continued provision of essential goods and services to the public," the statement added.

It also said discussions with international financial institutions, bilateral partners and other supporting organisations were progressing to strengthen the country's foreign exchange reserve position.