Maldives and United States America have signed an agreement for debt relief, under the G20 Debt Service Suspension Initiative (DSSI).

With the aim to temporarily suspend debt-service payments owed to bilateral creditors, Maldives High Commissioner to Sri Lanka, Omar Abdul Razzak and U.S. Ambassador to Maldives Alaina B. Teplitz signed the agreement on behalf of their respective governments, during a ceremony held at the High Commission of Maldives in Colombo, on Wednesday.

Following the agreement signing ceremony, the U.S. Ambassador took to Twitter, expressing hope that international partners will join in the efforts to help countries redirect their resources towards fighting the Covid-19 pandemic.

According to the Ministry of Foreign Affairs, the agreement will contribute “directly” to the economic recovery efforts that are currently ongoing in the face of the Covid-19 pandemic.

The ministry added that the agreement will improve debt transparency and debt management at a time a number of economic challenges have surfaced amid the pandemic.

This comes at a time the government also signed an Exchange of Notes with Japan, on the G20, Group of 20 nations, DSSI which came into effect on May 1, this year. The Exchange of notes with Japan was signed earlier this week.

The island nation’s Minister of Finance, Ibrahim Ameer signed a Memorandum of Understanding (MoU) on the Treatment of Debt Services, alongside representatives of numerous other creditor countries including the U.S and Japan, in September 2020.

G20 announced a six-month extension in October, giving developing countries until the end of June 2021 to prioritize expenses towards health care and emergency stimulus programmes rather than repaying debts.

USD five billion has been delivered as relief to over 40 eligible countries, under the initative.