Parliament approves overdraft extension til end of 2023

Finance Minister Ibrahim Ameer Photo: Majilis

Malé, Maldives – The Maldives Parliament has approved the Finance Ministry’s request to extend the overdraw period by an additional year with the condition to convert the overdraw amount till end of 2021 into an amortizable bond.

The parliament has previously granted overdraw approvals in 2020 and 2021 due to the Covid-19 pandemic with the newest approval extending the period until 2023.

The motion was passed by 42 members voting affirmative.

The Maldivian Parliament previously approved the suspension of Article 32 (a)(b)(e) of the Fiscal Responsibility Act allowing for MVR 4.4 billion to be overdrawn from the Maldives Monetary Authority (MMA) Public account.

The overdraft amount extended til the end of December 2023 has been decreased to MVR 2.5 billion as per the advise of MMA with the overdraw amount of MVR 2.5 billion to be converted into a financial instrument; the MMA granting the said amount as an amortizable bond for a 50 year period with a coupon rate of 2.5 percent.

MMA will impose a interest rate of 0.1 percent for the overdraw amount starting January 2022.