Maldives to stop printing money

Finance Minister Dr. Mohamed Shafeeg addresses the parliament on November 22, 2023. (Photo/People's Majlis)

Finance Minister Dr. Mohamed Shafeeq has asked the Parliament to lift the suspension on provisions of the Fiscal Responsibility Act – a measure implemented during the former administration in the wake of the Covid-19 pandemic.

In April 2020, the Parliament approved the suspension of Article 32 (a), (d), and (e) of the Fiscal Responsibility Act, in order to increase the overdraw limit of the public bank account at the central bank.

The suspension was later extended twice, with the government allowed to print up to MVR 4.4 billion.

In a letter to the Parliament, the new Finance Minister Shafeeq noted that the suspension of the legal provisions was implemented to manage exceptional circumstances resulting from the pandemic.

The circumstances have since changed, he said.

The latest extension to the suspension of the provisions is set to expire on December 31.

Statistics show that Maldives’ economy has bounced back from the downturn due to the pandemic, with both the real GDP and state revenue in 2022 higher than that during 2019.

“Therefore, given that an exceptional circumstance as stipulated on Article 36 of the Fiscal Responsibility Act no longer exists, I ask you to lift the suspension on Article (a), (d) and (e), and restore this Act to the fullest starting January 1, 2024,” wrote Shafeeq.

Shafeeq said that the government has decided to securitize the amount on money that was printed. MVR 4.2 billion has already been converted into long-term bond from the central bank.