Addressing the nation at the press meeting held yesterday, President Ibrahim Mohamed Solih has shed some light on the state’s efforts to secure the economy amid the COVID-19 pandemic. Answering to the local “Dhiyares News” at the press, President Ibrahim Mohamed Solih revealed that the state had failed in its efforts to sell $300 million of samurai bond to Japan.
The sale of these bonds were initially announced as means to fund the state budget. The growing debt with poor fiscal management has resulted in multiple international Fiscal rating Agency’s downgrading their rating on the Maldives. Due to this many foreign stakeholders have refused to purchase these bonds as a total market collapse has been predicted by some experts due to the Maldives’s dependence on tourism, which is the worst effected sector due to the COVID-19 pandemic.
The decision to sell the bonds was further criticized by financial experts as the bond rate was higher than the norm of the industry. President Ibrahim Mohamed Solih also revealed that even though they had failed in selling the bonds, he now plans to sell them to another buyer at a higher than norm interest rate. Sources close to the President has indicated that the state now aims to sell bonds worth $500 million at a high interest rate in a bid to prevent an economic collapse in the island nation.
This annunciation by President Solih coincides with growing concerns by the public due to the shortage of U.S dollars, as the black market rates spike an increased 12% during the last week. Economic uncertainty is further fuelled due to the government’s lackluster plans in executing a economic supplementation program, which many has described as a “failed bureaucratic blunder”.