India helping Maldives stabilise its 'stressful financial' situation: Foreign secretary Misri

Time of India

5 days ago

Foreign secretary Vikram Misri (ANI)
NEW DELHI: Foreign secretary Vikram Misri on Tuesday stated that India has been lending a "helping hand" to the Maldives to stabilise its "stressful financial" situation, highlighting New Delhi's role in bolstering the island nation's foreign exchange reserves through significant financial assistance.Addressing a press briefing ahead of Prime Minister Narendra Modi's visit to the Maldives, Misri elaborated on India's support for the island nation, noting that a $400 million swap line has been nearly fully utilised to stabilise its financial situation.Maldives has been grappling with a mounting debt crisis that threatens its economic sovereignty, as its foreign exchange reserves dwindle to precarious levels while substantial debt repayments loom.Maldives is currently needing to service external debt worth USD 600 million in 2025, which can amount to a staggering USD 1 billion by 2026.Misri also emphasised that India remains in close contact with Maldivian authorities to explore further support, describing the situation as dynamic and requiring ongoing collaboration."Insofar as the issue related to the financial stability of Maldives is concerned, it is a fact that it has faced a stressful financial environment, and that is why we have been giving a helping hand to Maldives in order to stabilise the financial situation.Our recent assistance has led to accretions in the foreign exchange position of the Maldives, and it is this accretion, as a matter of fact, that has been cited by international financial organisations, including the IMF, as a positive factor that has helped the Maldives stave off outcomes that could be difficult for it," the foreign secretary stated."This is a dynamic situation. We will remain in close touch with our friends and partners in the Maldives to see what else we can do. In any case, so far as the swaps are concerned, my understanding is that the USD 400 million swap line has been drawn almost completely, and now perhaps the USD 30 billion rupee Indian swap line will also be drawn upon," he added.Last year, during Maldivian President Mohamed Muizzu visit to India, the Union Government extended support in the form of $400 million and Rs 30 billion as a bilateral currency swap agreement in order to tackle the ongoing financial challenges faced by the Maldives.Earlier in May, the Union government has extended support to the island nation by rolling over the $50 million treasury bill.Addressing the broader turnaround in India-Maldives relations after ties between New Delhi and Male were strained following derogatory remarks made by Maldivian officials about Prime Minister Modi in early January last year, Misri underscored the resilience of the partnership.He credited the close discussions with Maldivian partners for providing clarity and assurances on the matter while highlighting India's continued support through its military or infrastructural assets provided to the Maldives for its development."There will always be events that will impact or try to intrude on the relationship. But I think this is testimony to the kind of attention that has been paid to the relationship, including attention at the highest levels that has been paid to the relationship. We've continued to work at it, and I think the result is there for you to see. I think we have also been in very close discussions with our partner partners in the Maldives to provide clarity and assurances about what it is that we want to do bilaterally, and I think this is the result is there for all to see," the Foreign Secretary stated."With regard to the assets that we have provided them. They continue to function there with the appropriate personnel to manage them and to assist the Maldives authorities in using them for the best possible results," Misri added.Notably, ties between New Delhi and Male were strained after Maldivian officials made derogatory remarks about Prime Minister Modi in early January last year.However, during the visit of Maldivian Foreign Minister Moosa Zameer in April 2024, Zameer distanced his government from the derogatory remarks made by these officials, stating that it was not the government's stance and that "proper action" had been taken to ensure such remarks were not repeated.Earlier in January, India handed over defence equipment and stores to the Maldives, as per the island nation's request, while reiterating its firm commitment to working closely in realising the joint vision for the India-Maldives Comprehensive Economic and Maritime Security Partnership, the Ministry of External Affairs said in a statement.PM Modi will embark on his two-nation tour of the UK and the Maldives from July 23 to July 26, the MEA had said on Sunday.From July 25, he will be on a two-day state visit to Maldives at the invitation of President Mohamed Muizzu. He has been invited as the 'Guest of Honour' for the 60th Anniversary celebrations of the Independence of Maldives on July 26.Notably, the visit by PM Modi comes at a historic juncture as New Delhi and Male are marking their 60th anniversary of the establishment of diplomatic ties.This will be the Prime Minister's third visit to the Maldives and the first visit by a Head of State or Government to the Maldives during the Presidency of Mohamed Muizzu.