South Asia

Sum of Measures 1—5 (Total Package)

Total Package in USD Million: 167.76
% of GDP (2019): 2.89%
% of Regional Total Package: 0.04%
Package Per Capita in USD: 315.97
Note: Measures 9 and 10 are added to the sum of Measures 1-5.
Measure Amount (Local) Amount (USD) Details Update Source
01 - Liquidity Support info_outline MVR76,844,828 USD5,000,000
01A - Short-term lending info_outline MVR76,844,828 USD5,000,000

(i) April 2020, The Government of Maldives will ensure, through banks, availability of working capital to businesses (Note that the amount is included in Measure 5.); (ii) 23 September 2020, The International Islamic Trade Finance Corporation (ITFC), member of the Islamic Development Bank (IsDB) Group, has approved a USD5 million Murabaha Financing Facility in favor of Bank of Maldives to support the Bank’s private sector businesses, particularly SMEs importing raw materials from the international markets.

01B - Support policies for short-term lending info_outline

No amount/estimate: April 2020, The Maldives Monetary Authority (MMA) announced measures including (i) reducing the Minimum Reserve Requirement (MRR) up to 5% as and when required. 23 April 2020, MVR required reserve was reduced to 7.5%. 16 July 2020, Foreign currency required reserve was reduced to 5%; and (ii) making available a short-term credit facility to financial institutions as and when required.

01C - Forex operations info_outline

April 2020, The MMA will increase foreign exchange intervention and use other available facilities to maintain the exchange rate peg.

02 - Credit creation info_outline
02A - Financial sector lending/funding info_outline
02B - Support policies for long-term lending info_outline
02B1 - Interest rate reductions
02B2 - Other policies to support long-term lending
02C - Loan guarantees
03 - Direct long-term lending info_outline
03A - Long-term lending info_outline

20 March 2020, The Economic Recovery Plan was announced. The Plan includes: (i) COVID-19 Recovery Loan Scheme for SMEs wherein eligible SMEs may apply for loans up to 10% of its annual sales turnover for the past year (capped up to MVR500,000) at 6% interest per annum for a 3-year period. The repayment period excludes the grace period up to 6 months in which no interest is charged. Funding is contingent on SMEs not laying off local employees due to the COVID-19 outbreak and during the funding period. As of 19 November 2020, total disbursed amount was MVR306.8 million; (ii) COVID-19 Recovery Loan Scheme for Self-employed and Freelance Individuals wherein eligible individuals may apply for loans up to MVR 30,000 at 6% interest per annum for a 3-year period. A grace period of up to 6 months is offered during which no interest is charged, and no payment of principal or interest is required Funding is conditional on the individual having worked in 6 of the last 12 months and earned a verifiable income during this period. As of 19 November 2020, total disbursed amount was MVR18.2 million; and (iii) COVID-19 Recovery Loan Scheme for Large Businesses wherein funding is contingent on no layoffs of local employees due to COVID-19 outbreak at the time of application. For eligible businesses, this is an unsecured facility provided at 6% interest per annum for a 3-year period, including a maximum 6-month grace period in which no interest and principal payment will be made. As of 19 November 2020, total disbursed amount was MVR554.7 million.

03B - Forbearance

No amount/estimate: April 2020, The Maldives Monetary Authority announced introducing regulatory measures to enable a moratorium of 6 months on loan repayments for those impacted by the current situation. Customers have to submit their requests to the banks in order to avail themselves of this moratorium. Debt moratoriums have been included in the Plan to support individuals, households, and businesses facing difficulties in meeting monthly debt repayment: (i) All loans from the Bank of Maldives are eligible for the debt moratorium from 1 March 2020 until end of September 2020. The debt moratorium will allow BML customers to defer monthly principal and interest repayments for 6 months. At the same time the tenor of the loan will also be extended by 6 months allowing more time to repay the accrued interest and principal repayments. Compound interest will not be charged during the moratorium period. Following the moratorium period, the repayment amount would be reduced by 20% for a further 6 months; (ii) Those liable to repay student loans by the National Student Loan Scheme and Educational Assistance Loan Scheme entered a 6-month period of debt deferment on 1 March 2020; (iii) Individuals with Housing Finance loans issued by Housing Development Finance Corporation (HDFC) had the option of applying for a 6-month debt moratorium, which started on 1st March 2020, under the condition that regular payments have been made. The debt moratorium allows HDFC customers to defer monthly principal and interest repayments for 6 months. Consequentially the initial loan periods would be extended by an additional 6 months; (iv) Bank of Maldives customers with business loans are eligible for the debt moratorium from 1 March 2020 until end of September 2020. The debt moratorium will allow customers to defer monthly principal and interest repayments for 6 months. At the same time the tenor of the loan will also be extended by 6 months allowing more time to repay the accrued interest and principal repayments. Following the moratorium period, the repayment amount would be reduced by 20% for a further 6 months; and (v) SME Development Financing Corporation (SDFC) customers will be eligible for a 6 months debt moratorium starting from 1st March 2020. The debt moratorium will allow customers to defer monthly principal and interest repayments for 6 months. Moreover, in the course of the moratorium period, interest rates for all loans are reduced to 4%. 26 August 2020, SDFC extended the repayment period for loans until the end of 2020. 9 September 2020, The Bank of Maldives opened its application for its second moratorium, for customers with personal, housing and business loan moratoriums with repayments due to start this September. The deadline of the repayments has been extended to December 2020. The Bank will also issue a separate announcement once the second moratorium application process is open for customers of BML's Islamic banking branch.

04 - Equity support info_outline
05 - Health and income support MVR2,501,500,000 USD162,763,069
05A - Health support
05B - Income support MVR1,500,000 USD97,599
05B1 - Tax and contribution deferrals and policy changes
05B2 - Tax and contribution rates reduction
05B3 - Wage support and subsidies to individuals and households

(i) As of May 2020, MVR48.2 million has been disbursed as the Government subsidized 40% of electricity utility bills of April and May 2020; (ii) As of May 2020, MVR10.2 million has been disbursed as the Government subsidized 30% of water utility bills of April and May 2020; (iii) No amount/estimate: 4 August 2020, the Ministry of Tourism reduced the fine imposed on late rent fees for tourist establishments from 0.5% to 0.0493%; (iv) No amount/estimate: Under the Financial Aid for Students Abroad under the Economic Recovery Plan, students would be paid for a maximum period of 2 months, in relation to the stipend rates set by the Ministry of Higher Education (MoHE). Eligible students will get a daily allowance corresponding to living allowance for their country of study, but will be capped at USD50 per day; (v) 7 October 2020, The government would extend the Income Support Allowance until the end of 2020. As of 19 November 2020, MVR129.2 million under the Income Support Allowance that is part of the Economic Recovery Plan had been disbursed.

05B4 - Subsidies to business MVR1,500,000 USD97,599

As of 17 November 2020, Ministry of Education extended aid of MVR1.5 million from the Zakat Fund to private-sector preschools and Qur’an classes in order to assist with the financial difficulties they are facing due to the ongoing COVID-19 pandemic. The ministry disbursed MVR1 million to 25 preschools while MVR500,000 was handed over to 23 Qur’an classes.

05B5 - Indirect income support
05B6 - No breakdown (income support)
05C - No breakdown (health and income support) MVR2,500,000,000 USD162,665,470

20 March 2020, To minimize the economic impact of the COVID–19 virus, the authorities announced an Economic Recovery Plan of MVR2.5 billion: (i) reduce the recurrent expenditure by MVR1 billion; (ii) increase the amount of funds allocated for the health sector; (iii) subsidize 40% of electricity bills and 30% of water bills in April and May 2020; (iv) provide special allowance to those who lose their jobs due to COVID-19; (v) arrange working capital for businesses through banks; (vi) defer principal and interest amount of loan repayments to Bank of Maldives (BML) by businesses and people who have been negatively impacted of COVID-19.

06 - Budget reallocation info_outline
07 - Central bank financing government
07A - Direct lending & reserve drawdown
07B - Secondary purchase: government securities
08 - International Assistance Received MVR10,511,318,833 USD683,931,448
08A - Swaps info_outline MVR6,147,586,207 USD400,000,000

April 2020, Obtained a foreign currency swap facility amounting to USD150 million under the currency swap agreement signed between the MMA and the Reserve Bank of India (RBI). 1 September 2020, The duration of the currency swap agreement signed between Maldives and India was extended. Presently, Maldives has already received USD150 million under this agreement. In addition, MMA revealed that the Government of India would grant further financing up to USD250 million. 20 September 2020, India has provided financial assistance of USD250 million to Maldives.

08B - International loans/grants MVR4,363,732,626 USD283,931,448
08B1 - Asian Development Bank MVR814,401,483 USD52,990,000

(i) 25 March 2020, USD0.5 million under the COVID-19 Emergency Response; (ii) 30 April 2020, USD0.65 million is the estimated support under TA 9950-REG: Regional Support to Address the Outbreak of COVID-19 and Potential Outbreaks of Other Communicable Diseases. This increased to USD0.80 million as of June 18; (iii) 20 May 2020, USD0.17 million under the Support to address Outbreak of Coronavirus Disease 2019 and Strengthen Health Systems Preparedness for Communicable Diseases in South Asia project. As of 18 July 2020, This amounted to USD0.06 million; (iv) 25 June 2020, USD50 million under the COVID-19 Active Response and Expenditure Support Program; (vi) 25 June 2020, USD0.50 million under the Improved Implementation of the Government's COVID-19 Response Package; (vii) 16 July 2020, USD1 million under the COVID-19 Emergency Response from the Asia Pacific Disaster Response Fund-Government of Japan; (viii) 4 September 2020, USD0.13 million Enhancing Gender Quality Results of South Asia COVID-19 Response.

08B2 - Other MVR3,549,331,143 USD230,941,448

(i) 2 April 2020, The World Bank’s Board of Executive Directors approved a USD7.3 million Maldives COVID-19 Emergency Response and Health Systems Preparedness Project to help the country prevent, detect, and respond to the COVID-19 pandemic and strengthen its public health preparedness. In addition, a USD10 million contingency financing, under Disaster Risk Management Development Policy Financing with a Catastrophe Deferred Drawdown Option (CAT DDO), signed in 2019, has also been made available to support Maldives; (ii) 15 April 2020, The OPEC Fund approved USD20 million under the Public Sector Investment Program (PSIP) Emergency Loan; (iii) 22 April 2020, The Executive Board of the International Monetary Fund approved the disbursement of SDR21.2 million (about USD28.9 million) to be drawn under the Rapid Credit Facility (RCF) to help cover balance of payments and fiscal needs, stemming from the COVID-19 pandemic; (iv) 2 May 2020, The Government of Japan provided an emergency grant of USD356,400 for UNICEF Maldives and USD185,000 for Maldives Red Crescent to assist the Government in its efforts to respond to COVID-19; (v) 20 May 2020, The United States through the US Agency for International Development will provide USD2 million under Economic Support Fund (ESF) as technical assistance to the government to develop effective economic, fiscal, monetary measures in response to the COVID-19 pandemic; (vi) 21 May 2020, The Government of Japan committed a grant of USD1.4 million to the UNDP Maldives that will support small and medium enterprises (SME’s) affected by COVID-19; (vii) The Islamic Development Bank (IsDB) provided USD20 million under the Emergency Response to COVID-19 Pandemic in Maldives that will strengthen the health system preparedness and response to COVID-19 pandemic by scaling-up one regional health facility capacity for case tracing and infection control and by improving the emergency health care quality, and will support in ensuring that at least 80% of confirmed COVID-19 cases admitted in project targeted ICU are treated as per the approved protocol, and will serve the targeted communities; (viii) 7 June 2020, The Government of Japan provides a grant aid of JPY600 million (worth USD5.6 million) to the Maldives. This grant aid will be utilized to procure medical equipment required to strengthen the capacities of health facilities in atolls/islands; (ix) 9 June 2020, The World Bank’s Board of Executive Directors approved a USD12.8 million COVID-19 Emergency Income Support Project to help Maldives mitigate the economic impact of the COVID-19 crisis on poor and vulnerable workers and their families; (x) 15 June 2020, The European Investment Bank (EIB) has signed a EUR20 million (approximately USD22.7 million) loan with the Ministry of Finance of the Republic of Maldives as a part of Team Europe action to help sustain the local economy, protect jobs and support SMEs operating in the tourism and industry sectors in the wake of the COVID-19 pandemic; (xi) 30 June 2020, Another USD7.3 million under the COVID-19 Emergency Response and Health Systems Preparedness Project (World Bank as the lead co-financier) is approved to be co-financed by the Asian Infrastructure Investment Bank (AIIB); (xii) 23 September 2020, The International Islamic Trade Finance Corporation (ITFC), member of the Islamic Development Bank (IsDB) Group, has approved a USD5 million Murabaha Financing Facility in favor of Bank of Maldives to support the Bank’s private sector businesses, particularly SMEs importing raw materials from the international markets; (xiii) 28 September 2020, The Government of Japan extended the COVID-19 Crisis Response Emergency Support Loan worth USD47.5 million (JPY5 billion) to Maldives; (xiv) No amount/estimate: 17 November 2020, United Nations Children's Fund (UNICEF) donated 46 laptops and 5,000 PCR test kits to support the Maldivian government's ongoing nation-wide effort to contain COVID-19; (xv) 11 December 2020, The World Bank’s Board of Executive Directors approved a USD107.4 million Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) project to help Maldives accelerate its transition to renewable energy and support sustainable recovery [Note The ARISE project is aligned with the World Bank Group’s strategy to tackle the post-COVID-19 challenges] [update].

09 - International Assistance Provided
09A - Swaps info_outline
09B - International loans/grants
10 - No breakdown
11 - Other Economic Measures

(i) April, Reduce recurrent expenditure by MVR1 billion; (ii) September 13, The Ministry of Finance decided to reassess and amend the state budget declared for the year 2020 due to the significant reduction in revenue generated by the state in the wake of the ongoing COVID-19 pandemic; (iii) September 27, The Minister of Tourism inaugurated the “Maldives Border Miles” program, aimed to boost tourism in Maldives. This is the first of its kind loyalty program developed in the entire world, and this program will be officially implemented on 1 December 2020.

12 - Non-Economic Measures
12A - Measures affecting travel and transport (local and international)

(i) 12 March 2020, The government declared a Public Health Emergency. There are several adopted containment measures, including (a) temporary suspension of on-arrival visa for all passengers arriving to Maldives by air and sea, (b) quarantine for all passengers traveling to Maldives by air except for tourists checking-in to resorts, (c) screening at ports of entry, (d) restrictions on travel between resorts and inhabited islands, (e) ban on all cruise ships from entering and docking; (ii) July 2020, International flights as well as tourism island resorts reopened.

12B - Measures affecting business and workplace

(i) 12 March 2020, Requirement on all guest houses and city hotels operating in the Maldives to temporally suspend all tourist check-ins since March 17; (ii) 18 May 2020, Allowing certain commercial businesses to open and operate; (iii) July 2020, While guesthouses in inhabited islands are opened since July for locals/residents in COVID-19 free islands, guesthouses will be opened for tourists in August; (iv) 28 September 2020, Guesthouses will be allowed to reopen on October 15, albeit with mandatory departure testing required for all tourists holidaying at inhabited islands in Maldives. Tourists visiting guesthouses are required to undergo PCR testing upon arrival in Maldives.

12C - Others

(i) 12 March 2020, School closures; (ii) 15 April 2020, The greater Malé region was placed on lockdown; (iii) 13 May 2020, The lockdown was extended to May 28 (third extension since its implementation); (iv) 28 May 2020: (a) The state of Public Health Emergency was extended until June 29; and (b) Phase one of lockdown easing started, with a relaxation in temporary permissions for leaving homes; (v) Since 1 July 2020, the country is in phase three of the lockdown ease plan. This phase permits movement in the Greater Malé Region from 5 AM to 11 PM, and only gatherings of less than 30 people are to be allowed in public spaces; (vi) 30 July 2020, Authorities mandated wearing face masks in public spaces of the capital city of Malé in response to a surge in COVID-19 cases in Maldives. Individuals in public spaces without masks would be fined by MVR1,000 starting from August 1; (vii) 4 August 2020, The Health Protection Agency (HPA) implemented a curfew over the Greater Malé Region; (viii) 3 September 2020, The Ministry of Education extended the closure of schools in the Greater Malé Region by an additional two weeks in connection to the surge of COVID-19 cases in the area; (ix) 6 September 2020, The extension of the State of Public Health Emergency until October 6 was announced; (x) 4 October 2020, Ministry of Education reopened schools in the Greater Malé Region and commenced teaching for grades 9 to 12 only, while online lessons were provided for students of lower grades; (xi) 6 October 2020, The State of Public Health Emergency was extended until November 5; (xii) 17 October 2020, The Ministry of Education revealed that classes for grades starting from six to all levels below, shall not restart within 2020, for schools throughout the Greater Malé Region.