Maldives government has overdrawn MVR 1.7 billion through Maldives Monetary Authority (MMA), the country’s central bank in October; marking an MVR 300 million increment compared to the previous month.
Since 2020, the Maldives government has engaged in the practice of printing money every month.
An amount of MVR 4.2 billion previously printed earlier this year has been transformed into long-term bonds. The monthly printing quota has been capped at MVR 2 billion, with the restriction aimed at curtailing the government’s ability to print additional currency each month.
The total monetary expansion for 2023 is poised to reach MVR 6.2 billion by factoring the expected printing of an additional MVR 2 billion by the year end.
Ministry of Finance revealed that MMA holds MVR 13 billion in long-term bonds, which has underpinned the government’s monetary strategy.
Maldives government enforced a printing limit up to MVR 4.4 billion in public bank accounts (PBA) since 2020, a restriction approved by the parliament for withdrawals until the conclusion of the 2023 fiscal year.
Before 2013 unrestricted overdrawing from PBAs was a common practice by the state governments which changed in 2014 when funds were no longer withdrawn for government operations while PBAs were exclusively used to service the state’s debt obligations.