Malé, Maldives – Finance Minister Ibrahim Ameer has requested to extend the overdraft period for the MVR 4.4 billion extended to the government by Maldives Monetary Authority (MMA) bypassing Article 32 (a)(b)(e) of the Fiscal Responsibility Act.
Finance Minister Ameer, requested on behalf of the state, to extend the overdraft period previously approved by the parliament for one year, ending on 26 April 2021, by another year.
Citing that Maldives has not been able to overcome the negative impact on the economy due to the Covid-19 pandemic, the state requested for the end date to be extended to 26 April 2022.
The Fiscal Responsibility Act stipulates that the state withdrawals from the central bank must be limited to an amount equivalent to 1% of the state’s average revenue based on the past three years of revenue collected, may be borrowed from the central bank, and must be repaid within 91 days of withdrawal.
Im April 2020, the one percent as stipulated by the Act was estimated at MVR 219 million. The government was approved by the parliament to withdraw MVR 4.4 billion in light of Covid-19 financial crisis to increase the cashflow.
The parliament at the time also approved for the overdraft amount to be changed in a way that does not include a finance cost for the period of one year.
The parliament is currently debating the requested extension.