MMA raises concerns over supplementary budget

17 Nov 2023 | 18:22
MMA Governor Ali Hashim-- Photo: edition MV

Maldives monetary authority  (MMA) has expressed concern over the government's supplementary budget for this year.

In a letter signed by MMA Governor Ali Hashim following the people’s  majlis request for advice on the supplementary budget, the letter advised that the supplementary budget should not be presented except in the event of major disasters and economic shocks.

The bank also recommends budget oversight arrangements to avoid the need to submit a supplementary budget to cover expenditure in the future.

Governor Ali Hashim further pointed out that the proposed supplementary budget includes  4.2 billion  rufiya for foreign borrowing. The MMA has also noted the possibility of not receiving the funds allocated in the supplementary budget within the next six months due to the lack of foreign financing and grants as expected in the past year.

The MMA noted that a large amount of money had to be printed this year alone and that it had securitized  4.3 billion  rufiya of the currency printed this year, after converting a large amount of the money printed during 2022 into long-term bonds now securitized by the government. Similarly, the government needs to raise 4.2 billion rufiya from abroad to maintain its reserves, the agency said, adding that changes in oil prices in the international market have caused serious strains on the reserves.

Highlighting all this, the MMA asked the government to reduce recurrent expenditure. And to give priority to essential activities in the management of capital expenditures.