The central bank, Maldives Monetary Authority (MMA)’s Governor, Ahmed Munawwar, has cautioned that the country's reserves will be affected if the funds required for next year’s budget financing is not secured.
The budget for next year, of MVR 56.5 billion, was presented to Parliament on October 31. The government has allocated MVR 19 billion in the budget for budget financing, including MVR 6.6 billion expected from foreign banks.
Addressing the Budget Committee at the Parliament on Thursday, the governor emphasized the critical need to secure the US$766 million or MVR 12 billion needed to finance the budget. He pointed out that the efforts to raise the funds require cooperation from all stakeholders.
The governor also said that the measures being taken to reduce government expenditure should be accelerated and reinforced. He noted that recent downgrades in the Maldives’ credit rating by some rating agencies have affected the country’s ability to obtain funds from foreign sources. He emphasized that its is essential to increase the country’s reserves to improve the credit standing.
“Given the current situation, new projects can be commenced and carried out only by obtaining external financing,” he said.
The governor further pointed out that next year's budget includes MVR 7 billion from the domestic market, independent of the MMA. He stressed the need to obtain these funds at the earliest, and said domestic market financing should not rely on the central bank.
