High-Level Summary Technical Assistance Reports

Maldives: Developing a Legal, Policy and Operational Framework for the Sovereign Development Fund

Author/Editor:

Sandeep Saxena ; Trevor A Lessard ; Marie-Helene Le Manchec ; John Gardner ; Martin Marcone ; Alissa Ashcroft

Publication Date:

August 8, 2023

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This High-Level Summary technical assistance report focuses on developing a legal, policy and operational framework for the sovereign development fund (SDF) in Maldives. Until the fiscal situation in Maldives improves, the SDF could continue to usefully serve the twin objectives of external debt repayment and credit enhancement. It has helped boost investor confidence, enabling Maldives continued access to international financial markets, and come in handy for liquidity management during the pandemic. Decisions are required on the size of the SDF, the treatment of any excess inflows, and the application of the Fund’s balance upon its liquidation. While the fund size of a sinking fund would correspond to the underlying debt, a credit enhancement objective would consider a combination of factors, such as market conditions, credit standing, liabilities covered by the fund, and the medium-term debt strategy. A strong governance framework would enhance the legitimacy, performance, and accountability of the IMF.

Series:

High Level Summary Technical Assistance Report No. 2023/009

Subject:

International organization Monetary policy

Frequency:

Regular