The Ministry of Finance, in a bid to convert the currency accumulated in the Sovereign Development Fund (SDF) entirely to US dollars (USD), is now depositing to the fund exclusively in USD, the government has confirmed. The SDF currently has in its reserve MVR 7.4 billion, including US$13 million raised within the past two weeks, the ministry said.

According to 2024 budget figures, the SDF received MVR 4 billion in airport development fees with cross-subsidy projects contributing MVR 1.4 billion and other sources adding MVR 2 billion.

Around 80 percent of the money in the SDF is invested in Treasury bills.

The SDF, established in 2017 during the Abdulla Yameen Abdul Gayoom administration with a view to better manage state debt, had, until December 2023, built up the bulk of its reserves in Maldivian Rufiyaa (MVR). The entire reserve will now be converted into USD under the administration’s ‘Week14’ roadmap.

According to the state budget breakdown, MVR 1.2 billion will flow to the SDF this year, and MVR 3.8 billion will be used to service state debt.

While the state will need to allocate MVR 8.2 billion towards debt repayment in 2025, SDF will contribute MVR 3.8 billion. In addition, debt will be refinanced through the SDF by issuing bonds, or sukuk.

The Mohamed Muizzu administration aims to build up an SDF reserve worth MVR 9.7 billion by the end of 2024, the bulk of which will be used to pay off debt in 2025 and 2026. State debt is currently estimated at MVR 120 billion.