The central bank, the Monetary Authority of Maldives (MMA), disbursed MVR 3.9 billion until December last year at the government's request, according to statistics.
According to data released by the MMA this month, the government borrowed an additional MVR 3.94 billion as advances as of December last year. MVR 2.11 billion was borrowed in November.
The Maldives faced economic challenges, and the budget became constrained in 2020 due to the COVID-19 pandemic. At the time, the Finance Ministry asked the Parliament to allow overdrawing funds as more than MVR 4 billion was needed immediately to run the state. The Parliament approved the move by temporarily suspending some provisions of the Fiscal Responsibility Act in April 2020. The suspension of some provisions of the Act was later extended. The extension, requested by the government, now expires by the end of this year.
A resolution was moved in the last session of Parliament, calling on the government to end the suspension of the Fiscal Responsibility Act. However, the resolution was rejected by the Parliament.
Under the Fiscal Responsibility Act, the state's borrowing limit from MMA is one percent of the average revenue of the past three years. However, due to the sharp decline in government revenue due to COVID-19, the Parliament increased the withdrawal limit to MVR 4.2 billion.
