Thursday 9th Dec 2021
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Printing money

Majlis Passed Motion To Allow Govt To Print Money

The Majlis has allowed the government to print money to meet its costs.
The Majlis granted the government to print MVR 2.5 billion within the 1 year period beginning on January 1st 2022. The Parliament Financial Committee had made two additional recommendations: to convert the overdrawn amount into 50-year amortized bond granted by the Maldives Monetary Authority, and to collect 0.1% on the total overdrawn amount for every month beginning January 1.
The government had previously said that MVR 4.4 billion would be overdrawn at once before the end of the month. If the Parliament Financial Committee’s recommendations are to be taken into consideration, then this amount would be repaid in the next 50 years. In addition, when the government prints MVR 2.5 billion next year, a total of MVR 6.9 billion would be injected into the economy. This increases the possibility of inflation.
The motion to allow the government to print money passed with 42 votes.
The opposition has launched heavy criticism against the government for its decision to suspend articles of the Fiscal Responsibility Act in order to print money.