India on Thursday said it has decided to extend the USD 50 million treasury bill for an additional year at the request of the Maldives government as a goodwill gesture.
The Indian High Commission in Maldives said in a press release, “At the request of the Government of Maldives, State Bank of India (SBI) has subscribed to Government Treasury Bills (T-Bills) of US$ 50 million issued by the Ministry of Finance of Maldives for a further period of one year from the maturity date of the previous subscription i.e. September 19, 2024.”
SBI has purchased treasury bills under an agreement signed by the previous government. According to a report by Adhu News Portal, SBI has purchased treasury bills worth a total of US$200 million at the rate of US$50 million for each bill.
Treasury bills were earlier advanced on an annual basis and interest was paid on them by the Indian government. However, the government of President Mohammed Muizzu paid US$50 million in January this year.
Maldives had requested the Indian government to extend the deadline for payment of the remaining US$150 million. India had agreed to advance an amount of US$50 million in May and the second instalment of US$50 million was due today.
“Heartfelt gratitude to External Affairs Minister @DrSJaishankar and Govt of #India for providing crucial budgetary support to Maldives with the rollover of a USD 50 million Treasury bill. This generous gesture reflects the enduring bonds of friendship between #Maldives and #India,” Foreign Minister Moosa Zameer said in a post on X on Thursday.
Heartfelt gratitude to Foreign Minister @DrSJaishankar And the government #India To provide crucial budgetary support to the Maldives with a US$50 million treasury bill.
This generous gesture reflects the enduring friendly relations between the two countries…
— Moosa Zameer (@MoosaZameer) September 19, 2024
Earlier in May 2024, SBI had subscribed to T-bills of US$50 million under the same mechanism, at the request of the Government of Maldives.
In a statement on Thursday, the Ministry of External Affairs said it “expresses its gratitude for the generous support extended by the Government of India to the Maldives in the form of budgetary support.” “This extension comes at a crucial time when the Government of Maldives is implementing a robust fiscal consolidation programme to address the grave economic challenges it is facing,” the ministry said.
The development comes days after Foreign Minister Zameer acknowledged that Maldives-India relations had soured during the initial days of the President Mohamed Muizzu-led government but stressed that the two countries had resolved the “misunderstandings”.
Relations between India and Maldives have become strained since Mohammed Muizzu, known for his pro-China ideology, became president. Within hours of taking oath, he demanded the withdrawal of Indian military personnel deployed on three aviation platforms gifted by India to Maldives. After talks between the two sides, Indian military personnel were replaced by civilians.
Unlike his predecessors, who visited New Delhi first after assuming office, Mohammed Muizzu first travelled to Turkey and then to China for his first state visit in January. He arrived in New Delhi on June 9 to attend the swearing-in ceremony of Prime Minister Modi.
Mohammed Muizzu will visit India on an official visit “very soon”, his spokesperson said last week.
The Maldives government is also working to defer repayment of loans taken from other countries, including China.
Most of the Maldives’ external debt is owed to China and India. The government’s debt service commitments have reached US$409 million this year, putting additional pressure on its already limited foreign exchange reserves.
The current currency reserves of Maldives are US$444 million, of which the usable currency reserves are US$61 million.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)