It has been reported that the amount of money printed by the Maldives government in 2022 has exceeded MVR 3.9 billion. According to statistics released by the Maldives Monetary Authority (MMA), during the month of November alone, the government printed MVR 2.9 billion. In 2020, the government established a print limit of MVR 4.4 billion from the Public Bank Account (PBA) and the legislation was subsequently passed in parliament.
The Maldives Monetary Authority utilizes an exchange rate as an external anchor; however, monetary stability can be jeopardized when the government engages in excessive money printing or aggressive open market operations.
The International Monetary Fund advised the Maldives to exercise caution in its money printing practices and to implement tighter monetary policy measures in order to protect its exchange rate peg and reduce the balance of payments deficits. Efforts to keep interest rates low by selling reserves to maintain the peg and subsequently printing money can lead the Maldives Monetary Authority to adopt a reserve money targeting framework instead of focusing on the exchange rate, resulting in an increase in domestic credit and a loss of reserves.