Former President Mohamed Nasheed has raised concerns over increasing government expenditure despite a significant decline in state revenue.
In a post on social media X, Nasheed expressed his gratitude to India for allowing the Maldives to utilize a 30 billion Indian Rupee swap facility. This follows the Maldives' repayment of a dollar swap facility obtained from the Reserve Bank of India (RBI) a year and a half ago.
"India released the new funding on the same day the previous debt was due. This is a common practice among nations known as a 'debt rollover'—essentially taking on new debt to settle existing obligations," Nasheed stated.
Nasheed further emphasized that the government must maintain a sustainable plan for debt management.
"While tourism revenue has plummeted by 30 percent, government spending remains excessively high and wasteful," Nasheed wrote.
Despite a ceasefire in the Iran conflict, the global economic outlook remains bleak. The Maldives' tourism sector, in particular, has faced a significant downturn due to a decrease in travelers transiting through the Middle East.
According to the Indian High Commission, the new swap facility includes concessions regarding interest rates and other terms. The Commission noted that since the introduction of the SAARC Swap Framework in 2012, India has provided a total of USD 1.1 billion in swap assistance to the Maldives.
The acquisition of this Rupee facility is expected to provide some relief to the ongoing pressures on the country's foreign exchange reserves.
