The Pension Office has stated that investing in a 2.4 billion rufiyaa bond as proposed by the Finance Ministry will not cause any financial loss to the Pension Fund. The office made this statement in a press release issued in response to concerns being raised about the government’s proposed bond.

According to information provided by the Pension Office, the Ministry of Finance and Planning has proposed a 2.4 billion rufiyaa Treasury Bond structured as a “dual currency” bond that provides returns in both Maldivian Rufiyaa and US Dollars. The statement details that the money needed for this new investment will be arranged by selling 2.4 billion rufiyaa worth of bonds currently held by the Pension Fund in the secondary market.

In making the decision on this investment, the Pension Board’s top priority has been to ensure that the Fund will not incur any loss. Accordingly, the office believes that investing in a dollar-earning bond is an important step, in line with advice given by consultants to diversify investments and strengthen the Fund’s liquidity. The Pension Office says that as a result, a dollar reserve will be created in the Pension Fund from the investments themselves, without needing to obtain foreign currency from the market.

Furthermore, the Pension Office notes that this transaction provides an opportunity to convert some of the short-term Treasury Bills already invested into long-term bonds, which would increase the overall portfolio return. While the Pension Office has issued such a statement, the Board’s Chairperson Dr. Ahmed Inaz recently resigned from the position in connection with differences of opinion that arose regarding this 2.4 billion rufiyaa bond that the government is attempting to obtain.