Maldives Rejects IMF Bailout, Focuses on Tax Hikes and Bilateral Aid

රොෂෙල් ප්‍රනාන්දු

The Maldives has brushed off rumors that it may look to the IMF for assistance, referring to its financial difficulties as “temporary.” The island nation in the Indian Ocean known for its opulent resorts is reportedly experiencing a decline in reserves, but it still has faith in its ability to overcome its financial obstacles. In an effort to increase cash, the administration is moving forward with tax reforms and reorganizing state-owned businesses.

Speaking during a visit to Colombo, Foreign Minister Moosa Zameer stressed that China and India, among other bilateral partners, are still committed to supporting the Maldives. The main lender, China, has promised more cash; the Maldives owes over half of its $3.37 billion external debt to China and India.

The visit comes after Moody’s and Fitch recently downgraded the Maldives’ credit rating, citing worries about the country’s foreign exchange reserves and capacity to pay down its $409 million debt this year. Zameer did, however, restate the government’s position that the economic downturn is just transitory.

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