Pension Office confirms the MVR 2.4 billion bond deal that cost it nine officials

The Maldives Pension Administration Office has completed the MVR 2.4 billion (US$155.5 million) transaction that has been hollowing out its leadership for ten months: the pension fund sold government securities to the central bank and used the proceeds to buy a newly issued long-term, dual-currency government bond, with settlement on 23 July, according to a detailed account published by the Maldives Independent.

The two-step structure matters because the direct route is illegal. The Fiscal Responsibility Act caps government borrowing from the Maldives Monetary Authority at MVR 900 million, repayable in 91 days. Selling through the pension fund reaches the same destination — central bank money in the state's accounts — by way of the secondary market. The government terms it quantitative easing; critics call it money printing through a legal loophole.

The price of approval is written in the staff list. Since the structure was first put to the fund in October 2025, nine senior figures have left rather than carry it: board members Ahmed Saruvash Adam, Ashraf Rasheed and Madhin Latheef, chief financial officer Hawwa Fajwa, chairman Ahmed Inaz, chief executive Sujatha Haleem, and — in July, as settlement approached — the chief legal officer and the fund's two most senior investment officers. The board that finally approved the deal in February did so with no chairman present; the fund told media that month the transaction "has not commenced".

Inaz, a former finance minister, had proposed an alternative — cutting bank reserve requirements so commercial banks could absorb the treasury bills through the normal market. The government declined. Before resigning, the board sought assurances the money would be used productively, and asked the president to meet them; he telephoned instead, to request approval.

"The board's decision to override internal management and control mechanisms... signals that political or fiscal pressures can penetrate the governance framework," Saruvash Adam warned when he left, pointing to where that road has led in Ghana and Zimbabwe.

The macroeconomic backdrop explains both the government's hunger and the critics' alarm. The state ran a deficit of MVR 1.5 billion to mid-July against a surplus of MVR 817 million in the same period last year; subsidies have already exceeded their annual budget with five months remaining. The parallel-market dollar, at MVR 19 in March last year, touched a record MVR 21.70 within days of the bond settling.

One more fact belongs in the record: as of this weekend, neither the Pension Office nor the central bank has published an official statement about the transaction. A MVR 2.4 billion operation on the retirement savings of every working Maldivian has been confirmed only in answers to a newspaper.

The pension fund holds roughly MVR 25 billion of its members' savings in government securities. The average member's balance is about MVR 123,000 — and it is denominated in the currency the transaction just created more of.