China's lending practices push Maldives toward sovereign default
The Maldives is grappling with a mounting debt crisis that threatens its economic sovereignty, as foreign exchange reserves dwindle to precarious levels while substantial debt repayments loom. The immediate financial challenge is daunting, with the Maldives needing to service external debt worth USD 600 million in 2025 and a staggering USD 1 billion in 2026. Usable foreign exchange reserves held by the Maldives Monetary Authority stood at below USD 65 million as of December 2024, an improvement from the alarming low of USD 21.97 million in July 2024. “Of the approximately USD 700 million in bilateral trade, Maldives exports comprise less than 3 per cent compared to China’s dominating 97 per cent import share. Similarly, President Muizzu’s appeals to China for USD 200 million in budget support from the China Development Bank, refinancing of debt service payments, and a currency swap have received no positive response.
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