India has extended critical financial assistance to the Maldives by rolling over a $50 million Treasury bill for another year, aimed at supporting the island nation’s ongoing financial reforms. The move underscores India’s commitment to its key maritime neighbour under the ‘Neighbourhood First’ policy.
The State Bank of India (SBI) has subscribed, for another year, to a $50 million Government Treasury bill issued by the Ministry of Finance of Maldives, at the request of the Maldivian government, the Indian High Commission in the Maldives said in a statement on Monday. The arrangement, described as a unique Government-to-Government initiative, provides interest-free financial support to the Maldives.
"This has been done under a unique Government-to-Government arrangement, as emergency financial assistance to the Maldives," the statement said, highlighting India’s continued economic support to its Indian Ocean neighbour.
Since March 2019, India has been working with the Maldivian government’s treasury through the State Bank of India, providing interest-free loans to the Maldives. The arrangement reflects the close diplomatic ties between the two nations and India’s strategic interest in supporting the economic stability of the island nation, seen as vital for maintaining security in the Indian Ocean region.
The Maldives is considered a crucial partner in India’s ‘Vision MAHASAGAR’ (Mutual and Holistic Advancement for Security and Growth across Regions), a strategic initiative aimed at promoting maritime security and economic cooperation in the region.
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Maldives’ Minister of Foreign Affairs, Abdulla Khaleel, expressed his gratitude for the timely support, tweeting, "This timely assistance reflects the close bonds of friendship between #Maldives & #India and will support the Government’s ongoing efforts to implement fiscal reforms for economic resilience."
India has also extended a special quota for the export of essential commodities to the Maldives earlier this year, further reinforcing the economic ties between the two nations. The financial aid comes at a crucial time as the Maldives seeks to strengthen its fiscal position and drive long-term economic resilience.
Treasury bill rollovers, such as this one, refer to the practice of reinvesting the proceeds from a maturing T-bill into a new bill, effectively extending the investment term, providing much-needed liquidity to the Maldivian economy.
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