New Delhi: India extended a $150 million foreign currency swap support to the Maldives on Tuesday to help the strategically important Indian Ocean island nation mitigate the impact of the COVID-19 pandemic.

The swap facility was extended under $400 million currency swap arrangement signed between India and the Maldives last July.

The currency swap facility is part of the $1.4 billion economic package announced by India for the Maldives during the state visit of President Ibrahim Mohamed Solih in December 2018, according to an official statement.

The Maldives is the only country, other than Bhutan, which has been extended the $400 million currency swap facility, it said.

"Done deal! India has extended $150 million foreign currency swap support to @MMA_Maldives under the $400 million bilateral agreement signed in July 2019.The arrangement was activated to help Flag of Maldives mitigate the financial impact of COVID-19," India's High Commission in Maldives tweeted.

India stands shoulder-to-shoulder with the Maldives in tackling the global COVID-19 pandemic and providing financial stability. India is also considering extending the validity of the currency swap facility by one year, the statement said.

India's decision to activate the currency swap arrangement comes a week after Prime Minister Narendra Modi spoke with President Solih on the "health and economic challenges" the COVID-19 pandemic poses for the island nation.

India will stand by its close maritime neighbour and friend in this challenging time, Modi said in a tweet after speaking with Solih.

Modi paid a two-day visit to the Maldives in June, his first bilateral trip after his re-election for a second term. He also visited the Maldives in November 2018 to attend President Solih's swearing-in ceremony.