The Maldives Pension Office has clarified its decision to invest in a dual-currency treasury bond that provides returns in both Maldivian Rufiyaa and US Dollars, stating that the move was made to safeguard liquidity and strengthen long-term portfolio performance.

In a statement, the Maldives Pension Office said it approved a proposal submitted by the Ministry of Finance and Planning to invest MVR 2.4 billion in a treasury bond offering returns in both currencies. The office noted that the investment decision was taken after careful consideration of the fund’s liquidity position and broader investment strategy.

The Pension Office stated the funds for this investment will be sourced from the sale of an equivalent value of treasury bonds currently held under the Maldives Retirement Pension Scheme on the secondary market. It stressed that the bonds would be sold in a manner that avoids any loss to the pension fund.

The office explained that key factors considered by its board included ensuring that the sale of bonds to finance the purchase would not adversely affect the fund, aligning the investment with advice from long-term investment consultants, extending the average duration of assets held, and improving overall portfolio returns. Investing in a bond that generates dollar returns was also cited as a way to enhance the fund’s resilience.

The Pension Office further stated that the transaction would help build foreign currency reserves within the pension fund without the need to purchase foreign currency from the market. It added that converting some existing treasury bills into longer-term treasury bonds would also contribute to higher portfolio returns over time.

In its statement, the office emphasised that under the Pensions Act, the board is legally obliged to prioritise the best interests of fund members and to make decisions that maximise benefits. It reiterated that all actions related to this investment were carried out in accordance with Maldivian pension laws, regulations, established policies, and the long-term investment strategy of the Maldives Retirement Pension Scheme.