MVR 3.9 billion in bank notes was printed in 2022 to meet the government’s cashflow, according to records released by the Maldives Monetary Authority (MMA).
The unaudited financial statement released by MMA for the months of December 2022 shows the advance to government stood at MVR 3.9 billion by the end of December. The figure shows the value of bank notes printed by the central bank at the government’s request.
The financial statement shows MVR 1.8 billion in bank notes was printed in December 2022 alone.
The government had printed a large amount of bank notes in 2013 before stopping the practice in 2014.
The government began printing bank notes again in face of cashflow constraints due to the Covid-19 pandemic.
During a meeting with the Parliament’s Budget Committee last year, Finance Minister Ibrahim Ameer said he found printing bank notes or overdraft the best fiscal policy given the economic circumstances.
Deciding to take more loans instead of extending the overdraft could risk worsening Maldives’ debt, he said.
Economic experts warn that printing Maldivian Rufiyaa while Maldives experiences a shortage in foreign currency would have a negative impact on the economy, and that continuing to print bank notes with devalue the local currency.
However, the government projects a positive economic outlook, fueled mainly by an expected increase in tourist arrivals, which is expected to increase the influx of foreign currency.