Parliament has today approved Finance Minister Ibrahim Ameer’s request for a one year extension to the period of suspension for some clauses of the Fiscal Responsibility Act to manage government’s cashflow.
The initial request was rejected a few days ago by the parliament, however, it was later resubmitted and sent for review by a special committee. The committee gave its approval after review and 47 MPs voted for approval at the parliament today.
Maldives Monetary Authority (MMA) raised its concerns regarding the extension to overdraw at the committee. MMA warned that monetizing the budget will result negatively on the economy in the midterm and long term, and that given that the exchange rate is crucial in controlling the inflation rate in Maldives, long term monetary financing will present further challenges to MMA’s efforts to stabilize the exchange rate.
Despite the concerns from MMA and Auditor General’s Office, the parliament’s committee decided to approve the request and omit the recommendations made by both.
Opposition PPM-PNC has also expressed concerns regarding the extension after the government has already used MVR 4.4 billion as overdrafts from MMA.