The total amount to be spent on public debt repayment is estimated to exceed MVR 7 billion by the end of 2021, the Auditor General’s Office said.
The key risks associated in the state’s debt portfolio, according to a study issued on Thursday by the Audit Office, are a rise in the amount to be spent on debt repayment, probable changes in interest rates, and low levels of foreign currency reserve.
The research also said the amount spent on debt repayment will reach MVR 7.1 billion by the end of 2021, up from MVR 2.6 billion at the end of 2020.
The increase in debt payments is mostly attributable to the repayment of 76.6 percent of a Eurobond worth USD 192 million, which is part of a total value of USD 250 million due to bond maturity in March 2022.
The second major cause for the increase in debt payments amount is the ending of the loan easement given by G20 nations during the pandemic, which will be terminated by the end of December 2021.
The audit report said that, while the government has been given the possibility to extend USD 100 million of the total amount of the Eurobond by three years, it is just a short-term solution. The USD 100 million bond is set to mature in March 2023.