Nasheed claims publicized reserve amount is 'misleading'
Former President Mohamed Nasheed has said that while MMA reported usable foreign reserves were at USD 201.5 million, most of it is borrowed.
The Maldives Monetary Authority (MMA) offices in Malé
Former President Mohamed Nasheed has responded to the central-bank Maldives Monetary Authority‘s (MMA) reported foreign currency reserve, insisting that the larger chunk of the sum did not belong to the Maldives.
The MMA released its Statement of Financial Position for February 2017 last week, which reports that the bank’s usable foreign reserves were at USD 201.5 million.
Nasheed posted a tweet describing the MMA’s provided figure to be misleading, adding that only about one-eighth of it actually belongs to the central-bank.
MMA had further said that it had acquired USD 100 million as swap transactions from the Reserve Bank of India, the country’s central banking institute, to be paid with interest in three months.
The bank had also revealed that the borrowed sum is a bullet loan, requiring the State to pay both principal and interest at the end of the loan period.
The World Bank released a debt sustainability report on the Maldivian economy in 2015, which cautioned the state against debt accumulation in what the Bank described as debt percentages that grow significantly every year. In its report. the Bank placed its focus primarily on the public debt having exceeded the nation’s GDP.
Its analysis reports that the Maldives’ public debt at the end of 2015, was 73.1 percent of the GDP, was expected to rise 83.1 percent in 2016, and 109 percent by 2018. This report further stated that, in the next four years, the local debt per capital would rise to 120 percent – at MVR 140,000.
“Overall Maldives is judged to face a moderate risk of external debt distress, based on an assessment of public external debt, but a heightened overall risk of public debt distress, reflecting the significant and high vulnerabilities related to domestic debt” the report said.
