T-bill sales must be halted, no progress in it: President Nasheed

Former President Mohamed Nasheed has called on the Government to cease the sales of Treasury bonds.

In conversation with RaajjeTV’s Fala Suruhee program, the former President said the sale of T-bonds and bills only contributes to a precarious economic situation, adding that no progress can be gained from such transactions.

He made the statement in reference to the sale of T-bonds valued at US$ 200 million by the Government of Maldives.

Nasheed said the Government aims to settle the financial situation of the economy with the sale of bonds valued at US$200 million. However, he noted that this was only a temporary solution and the effects of such a transaction, will last at best for a month’s period.

“As you know the Government has to spend over MVR 700 million a month on salaries. We do not have the reserves that should be there to spend on water, electricity, food, medication. If this trajectory continues then we’re looking at a very difficult time,” Nasheed said.

Nasheed said bonds must not be sold, noting there were many associated payments that must be made off when the bonds are paid back. He questioned how the bonds will be paid back, given the reserves are at US$ 50 million and when the bonds have to paid back in US$.

“In my opinion we should not be selling US$ 200 million in treasury bonds. We have to pay back the bond in US$ with interest rates. Today our reserves are at US$ 50 million, how are we to pay back the bonds. A bond matures in a period of 120 days, how are we to source funds to pay back the bonds in this period? None of these aspects are clear,” President Nasheed said.

Nasheed noted that sales of bonds were a temporary financial measure and will not assist in overcoming the economic challenges. He said bond sales will only provide funds to cater to the needs of a month, adding no growth to the economy.

“Treasury bond sales only creates a bigger crisis for the Government. They can fund expenses for a month, but not more,” he said.

Taking a critical stance of the economic policies of the Government, Nasheed said that Yameen’s economic agenda had failed. He also said that Yameen do not have the capabilities to manage the economy.

“For many, a basic grade 10 education, gives a false sense of knowing. Managing a nation’s economy, is not as cut and dry as in textbooks. You need advice of many for this,” Nasheed said.

Nasheed noted that under Yameen’s management STO had sustained heavy losses, similar to the current status of STELCO currently. He also said the same pattern is now applicable to the Maldivian economy.