Gov't requests extension on overdraw period

The Ministry of Finance has requested an additional extension for an overdraw taken from the central bank, Maldives Monetary Authority (MMA), last April.

Some articles of the Fiscal Responsibility Act were suspended in April 2020 to allow the government to borrow MVR 4.4 billion from the central bank to manage state cash flow, to effectively manage state finances in the face of the COVID-19 pandemic. Earlier this year, the overdraw period was extended until April 2022.

A letter sent to the Parliament by Finance Minister Ibrahim Ameer on Tuesday requested Parliament approval to further extend the overdraft period until April 2023. In his letter, the minister said although the Maldives' economy has flourished due to the tourism sector showing significant improvement, the world is still battling the pandemic. The risks to the economy are still very real, and attempting to pay the overdraft in a short amount of time would cause challenges to cash flow management and implementing the budget, he said.

'While there are obstacles to get financing, not overdrawing even from April 2022 onward will affect the economy and the services provided by the state,' the letter read.

In this regard, the government is seeking a one-year extension on the exceptions levied on subsections a), d), and e) of Article 32 of the Fiscal Responsibility Act.