According to official data, in October, the government overdrew MVR 1.7 billion through the central bank, the Maldives Monetary Authority (MMA). This marked an increase of MVR 300 million compared to the preceding month. Notably, since 2020, the government has engaged in the practice of printing money every month.
An amount of MVR 4.2 billion, previously printed by the government earlier in the year, has been transformed into long-term bonds. Consequently, the monthly printing quota has been capped at MVR 2 billion. This restriction curtails the government’s ability to produce additional currency each month.
Taking into account the conversion of MVR 4.2 billion into bonds and the anticipated printing of an additional two billion by year-end, the total monetary expansion for the year is poised to reach MVR 6.2 billion. Finance ministry data reveals that MMA holds MVR 13 billion in long-term bonds, representing the financial instrument underpinning the government’s monetary strategy.
Since 2020, the government has enforced a printing limit of up to MVR 4.4 billion in public bank accounts (PBA), a restriction approved by parliament for withdrawals until the conclusion of the current fiscal year.
Before 2013, unrestricted overdrawing from PBAs was a common practice in governments. However, this changed in 2014 when funds were no longer withdrawn for government operations, and PBAs were exclusively utilised to service the government’s debt obligations.