The rate of Maldivian sukuk in the global market has increased after the Maldives Monetary Authority (MMA) announced plans to sell an additional sukuk to pay USD 500 million (MVR 7.7 billion) sukuk next year.
The Maldivian sukuk is currently trading at 87.51 cents per dollar. This is the highest price of the Maldivian sukuk in the past year. A year ago, the Maldivian sukuk was trading at 87.10 cents per dollar.
The price of the sukuk has risen after falling to an unprecedented level. On April 7, Maldivian sukuk was trading at 46 cents per dollar.
Last year, Fitch Ratings downgraded the credit rating, sparking rumours of default. The dollar fell to 66 cents following the Fitch rating.
MMA Governor Ahmed Munawar said in an interview with CNN Economics on the sidelines of the Islamic Development Bank (IDB)'s annual general meeting last month that the sukuk would be refinanced.
The government has not yet shared an exact plan to pay the sukuk. However, in the budget passed for this year, the government states that it intends to refinance the sukuk.
When the government refinances sukuk, it will be difficult to refinance at a cheaper price. This is because agencies have downgraded the credit rating. Borrowing during a period of low ratings will make the cost of repayment higher.
