The finance minister of the Maldives, Abdulla Jihad, has said that cash flow management in the Indian Ocean island has been “extremely difficult” and that even paying salaries next month would be difficult if the government was unsuccessful in securing US$25m funding from India.
During the on-going Parliament’s Finance Committee meeting, Jihad stressed that the cash flow is being managed on a day-to-day basis. “Budget financing is the issue. It’s extremely difficult to finance such a wide gap. Even if we open treasury bills, the banks aren’t willing to invest in treasury bills [T-bills]. So we are facing quite a lot of difficulties,” he said.
The minister added that even now there are T-bills worth Maldives ruffiya (MVR)5.3bn and the government would face a deficit of the same amount if the T-bills are not rolled-over. “Every day of every week we speak to the banks and roll-over those T-bills. If we don’t succeed the deficit will only increase,” Jihad said.
He also pointed that under current agreements a public bank can only purchase T-bills up to MVR100m, which added to the problems. “So we are managing under such adverse conditions. The loans included in the budget are such that it would be impossible to finance without them,” Jihad added.
On day one of SIBOS, panellists unanimously agreed that doing nothing to modernise payments was no longer safe bet for transaction banking.
On day one of Sibos 2017, Stefan Dab, The Boston Consulting Group led a conversation examining the future of correspondent banking, and specifically the pain points corporate treasurers face in their cross-border payments operations and where technology can be developed to alleviate these.
Rising interest rates, excitement around blockchain use cases and cross-border payments were all hot topics at this year's AFP conference in San Deigo.
The US dollar and debt yields falling on the North Korea missile test, treasury being a top target for cyber criminals and why treasurers aren't into real-time payments all hit the latest headlines in the world of treasury this week. Don't miss our ten top news stories from around the world.