Former President and MDP Chairperson Mohamed Nasheed has criticised the administration's financial management, claiming that its failure to secure foreign financing forced the government to use domestic dollar reserves to repay foreign debts, causing a severe dollar shortage in the country.
In April, the Maldivian government settled $924 million in foreign debt, which included $524 million for a sukuk and $400 million owed to the Reserve Bank of India (RBI).
Speaking on a program broadcast by "Aslu TV," Nasheed noted that heavy debt servicing pushed parallel-market exchange rates past MVR 21.35 per US dollar.
He revealed that the Climate Vulnerability Forum (CVF), an organisation he previously served as Secretary-General, had offered to assist the Maldivian government with a debt restructuring framework.
Nasheed, who previously advised Sri Lanka on managing its debt crisis, highlighted that the CVF assists member countries in restructuring sovereign debt. However, the government declined the CVF's assistance, opting instead to execute its own independent strategy.
According to Nasheed, that strategy failed to yield results. The administration was unable to secure new funding or access global capital markets, forcing it to exhaust its locally available foreign currency reserves to meet external debt obligations.
The sharp rise in the dollar's value comes amid record debt repayments, lack of new foreign direct investment, and reduced external borrowing capacity.
