Deposits in the Sovereign Development Fund (SDF) have increased by 60 per cent as of June 26 this year, reaching over MVR 1 billion (approximately USD 65 million), according to the latest figures from the Ministry of Finance.

This marks a significant rise from MVR 629.9 million (around USD 40 million) recorded during the same period in 2024, reflecting a 60.1 per cent year-on-year increase in Government contributions.

International financial institutions and credit rating agencies view the surge as a sign of the Maldives’ strengthened capacity to manage its external debt. The rise in dollar-denominated deposits is expected to improve the country’s debt-servicing ability.

The Sovereign Development Fund was established in 2017 to support debt repayments, particularly for a Sunny Side bond issued by the Maldivian Government. By 2020, the fund had accumulated over USD 150 million. However, amid the COVID-19 crisis, the then-administration converted these dollar reserves into Maldivian Rufiyaa (MVR), according to a 2021 IMF report.

By the end of 2023, when President Dr Mohamed Muizzu took office, the fund’s US dollar holdings had declined to around USD 2 million due to the absence of fresh dollar deposits.

Reports by Fitch and Moody’s indicate that since President Dr Muizzu assumed office, the Government has resumed depositing US dollars into the fund.