Maldives Finance Minister Reveals Cash Flow Crisis
The finance minister of the Maldives, Abdulla Jihad, has said that cash flow management in the Indian Ocean island has been “extremely difficult” and that even paying salaries next month would be difficult if the government was unsuccessful in securing US$25m funding from India.
During the on-going Parliament’s Finance Committee meeting, Jihad stressed that the cash flow is being managed on a day-to-day basis. “Budget financing is the issue. It’s extremely difficult to finance such a wide gap. Even if we open treasury bills, the banks aren’t willing to invest in treasury bills [T-bills]. So we are facing quite a lot of difficulties,” he said.
The minister added that even now there are T-bills worth Maldives ruffiya (MVR)5.3bn and the government would face a deficit of the same amount if the T-bills are not rolled-over. “Every day of every week we speak to the banks and roll-over those T-bills. If we don’t succeed the deficit will only increase,” Jihad said.
He also pointed that under current agreements a public bank can only purchase T-bills up to MVR100m, which added to the problems. “So we are managing under such adverse conditions. The loans included in the budget are such that it would be impossible to finance without them,” Jihad added.