Maldives settles USD100 mln with India in currency swap

Maldives Monetary Authority (MMA) in capital Male.

Maldives Monetary Authority (MMA) in capital Male.

The Maldives last month settled USD 100 million owed to the Central Bank of India under the currency swap agreement between the two South Asian neighbours, stated Maldives Monetary Authority (MMA).

The Maldives entered the currency swap agreement with India’s central bank in order to offset the archipelago’s reserves after the government paid USD 271 million to India’s GMR Group as compensation for breaking the contract awarding operations of Velana International Airport (VIA) to GMR.

Out of the total compensation, MMA had spent USD 140 million to purchase bonds sold by Maldives Airports Company Ltd (MACL) in order to aid the company settle the payment with GMR. MMA purchased the bond at an interest rate of 4.9 percent, to be repaid within three years. The government stated at the time that MACL will pay the amount to MMA monthly in US Dollars.

MMA’s monthly economic review shows that the Maldives’ usable reserves had increased to 66 percent last month after the finance ministry sold an international bond for the first time. The bond was sold for USD 200 million, after which the Maldives was listed on the Singapore Stock Exchange.

However, the reserves have gone down again after MMA settled the USD 100 million owed to India’s central bank.

The statistics show that official reserves at the end of June were at USD 603.5 million. While the amount is three percent lower than last year’s record, it is a monthly spike of 13 percent.

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