New Delhi: India on Sunday provided a soft loan of $250 million to the government of the Maldives as budgetary support to mitigate the economic impact of the COVID-19 pandemic, the latest in a string of support measures for the Indian Ocean archipelago.

The grant, provided under the most favourable terms possible, was in response to the request made by President Ibrahim Mohamed Solih to Prime Minister Narendra Modi to overcome the difficult economic situation in the Maldives.

The financial aid, first announced during a virtual meeting between Foreign Minister of Maldives Abdulla Shahid and his Indian counterpart S Jaishankar on August 13, was handed over at a ceremony in the Maldives’ foreign ministry attended by Shahid, finance minister Ibrahim Ameer, Indian envoy Sunjay Sudhir and senior State Bank of India official Bharat Mishra.

Abdulla Shahid thanked India for the financial assistance and speaking in Hindi termed India as a "Mahan Mitra" of the Maldives during the tough times caused by the pandemic

Prime Minister Narendra Modi said on Monday India and Maldives as close friends and neighbours will continue to support each other in their fight against the health and economic impact of COVID-19.

Modi was responding to a tweet by Maldives President Ibrahim Mohamed Solih in which he expressed his thanks to the Prime Minister for India's financial assistance to his country.

"India has always risen to the occasion whenever Maldives needed a friend. My sincere thanks to PM @narendramodi , government and people of India for their neighborly spirit and generosity following the official handover of USD250 million as financial assistance today," Solih said.

Modi replied, "Appreciate your warm sentiments, President @ibusolih! As close friends and neighbours, India and Maldives will continue to support each other in our fight against the health and economic impact of COVID-19."