Maldives Repays USD 50 Million Indian Loan

The administration of President Mohamed Muizzu has announced the repayment of USD 50 million owed to India, marking another significant milestone in what the government describes as its ongoing efforts to reduce the debt burden accumulated under previous administrations.

Speaking to reporters at the President’s Office, President Muizzu confirmed that the payment, which fell due on May 11, had been settled in full. The loan had originally been contracted during the administration of former President Ibrahim Mohamed Solih.

The President stated that his administration has now completed repayments amounting to USD 524 million, in addition to managing USD 400 million in currency swaps over the past forty days.

According to President Muizzu, these measures represent tangible progress in addressing what he described as a “debt trap” created by previous governments.

“The people have been liberated from USD 974 million in debt burden in 40 days,” President Muizzu said, framing the repayments as a direct benefit to Maldivian citizens facing the long-term implications of rising national debt obligations.

The President explained that the USD 50 million payment made on May 11 formed part of a larger series of loans obtained from India during 2019. He stated that the previous administration had borrowed USD 50 million on three separate occasions — on March 17, June 26, and October 1 — resulting in a cumulative debt of USD 150 million.

Rather than settling the obligations, the former administration had opted to roll over the debt annually throughout 2020, 2021, and 2022, a practice President Muizzu characterised as unsustainable.

Providing a chronology of the current government’s handling of the loans, President Muizzu noted that his administration had already settled a USD 50 million payment due on January 7, 2024, while rolling over the remaining balance.

With the latest repayment now completed, only USD 50 million remains outstanding from the original USD 150 million loan package. The final instalment is scheduled to fall due on September 17 this year.

“We have been rolling over and today we have paid 50 million. There will be another 50 million left, which is due on September 17. Hopefully we will pay that too on September 17,” he said.

The President also criticised what he described as misleading statements from former senior officials regarding the country’s economic situation.

“This is the debt trap that the previous government has put on the people. The people are being saved from this debt trap,” President Muizzu said.

He expressed concern that certain former officeholders were making statements that could undermine public confidence and damage the country’s economic image internationally.

“I regret that people who hold high positions in the state are making various unfounded statements to create unrest among the people and to create a bad image about this country and to destroy the economy of the country,” he said.

The President’s remarks came after former President Mohamed Nasheed, speaking at the Indian Ocean Dialogue in New Delhi, criticised the government’s approach to external financing.

Nasheed argued that loans and grants from allied countries and multilateral institutions should be directed toward productive economic programmes rather than routine expenditure.

The exchange reflects the continuing debate within Maldivian politics over external borrowing, debt management, and the balance between fiscal sustainability and economic development priorities.