China Gives Green Light to Defer Maldives Debt for Five Years

This announcement was made during an official Independence Day event at the Social Center in Male. According to World Bank data, the Maldives owes China USD 1.37 billion, representing 20% of the nation's external debt.

President Muizzu highlighted ongoing efforts to stabilize the Maldivian economy, noting that technical arrangements are currently being finalized to delay repayments for loans taken through China's Exim Bank for past development projects. The Indian and UAE governments have similarly deferred Maldives' debt repayments, with India deferring USD 50 million.

The President emphasized that, despite the financial challenges, the government has managed to pay MVR 3.8 billion without printing money and has avoided any loan defaults in the past eight months. He assured that the government is focused on managing the economy and securing economic stability for the next five years.

However, there appears to be some inconsistency in communication, as Chinese Ambassador to the Maldives Wang Lixin stated in May that China had no plans to delay repayments. The ambassador cautioned that restructuring the debt could limit Maldives' ability to secure future loans from China and emphasized China's careful approach to handling debt, prioritizing free aid projects in the Maldives.

Upon his return from a visit to China in January, President Muizzu had previously indicated that China might ease the debt repayment terms. Yet, in March, the Maldivian central bank reported having no information regarding a restructuring agreement. During a recent visit to China, Foreign Minister Moosa Zameer met with China's Exim Bank officials to discuss President Muizzu's reform program and future cooperation, including the latest economic and financial situation in the Maldives.