Parliament Speaker rejects emergency motion over govt's money printing plan

Parliament Speaker Abdul Raheem Abdulla on Tuesday rejected an emergency motion filed by the main opposition Maldivian Democratic Party (MDP) expressing concern over the plan by the People’s National Congress (PNC) administration to opt for money printing or monetary financing to meet Maldives’ staggering debt obligations.

During his 2023 presidential campaign, President Dr. Mohamed Muizzu vowed he would never print money, as his predecessor had resorted to during the Covid-19 pandemic. He repeatedly reiterated this pledge after coming to power, and listed avoiding printing money as one of the biggest achievements of his administration in its first year.

However, Sun has been informed that the administration is engaged in negotiation on selling a large plot of land from Hulhumale’ that is under the management of the Housing Development Corporation (HDC) to MMA for a price of MVR 14 billion – MVR 15 billion.

On Sunday evening, President Muizzu hosted lawmakers from the ruling PNC at the presidential palace, Muliaage, to discuss the plan.

He reportedly insisted to lawmakers that it does not count as money printing.

However, money printing or monetary financing is the practice of a government borrowing money from the central bank to finance public spending instead of selling bonds to private investors or raising taxes. It is not limited to the act of physically printing money.

The PNC administration has yet to make an official comment regarding the move.

Keyodhoo MP Mohamed Niushad, a lawmaker from the MDP, submitted an emergency motion to the Parliament on Tuesday morning expressing concern over the situation.

However, Abdul Raheeem, the chairperson of PNC, rejected the motion citing that it does not meet the criteria for an emergency motion.

He said that emergency motions must be “based on a fact.”

In his emergency motion, Niushad said there is no acceptable reason why the MMA should be procuring land or buildings beyond their administrative needs. He said that it is important to investigate “the government’s hidden motivation” in opting to print money.

Niushad warned the move could lead to the loss of MMA’s independence, a consequence of which would be the loss of credibility of Maldives’ entire financial system.

He also noted that money printing was not mentioned in the 2025 budget, and expressed concern over the administration’s decision to resort to that option without notifying the Parliament.

Niushad noted that the move will weaken the Maldivian Rufiyaa, sharply increase the foreign exchange rate, and fuel inflation.

The plan to print MVR 15 billion has been met with concern not just from the opposition, but also from economists.

The MDP administration had printed MVR 8 billion due to the economic downturn during the Covid-19 pandemic. The former administration claims it resorted to printing money because it was left with no other choice to a complete cease in economic activity after the country’s airports were shut down.

But the move was widely slammed by the PNC administration in the past.

President Muizzu repeatedly blamed the Maldives’ current economic crisis on the “poor decisions” of the MDP administration, including the decision to print money. He said his administration would improve the Maldivian economy without resorting to money printing.

However, government officials have refused to comment on the plan to raise MVR 15 billion with the sale of land.