In March, the Maldivian government borrowed MVR 4.3 billion from the Maldives Monetary Authority (MMA), the country's central bank. This move has raised concerns over the nation's financial stability, as the government continues to borrow heavily to finance its expenditures.
MMA's investments in government treasury bonds reached MVR 12.6 billion as of March, a significant increase from MVR 8.3 billion at the end of February. Selling treasury bonds to MMA is one way the government generates funds without meeting its revenue targets. The government has also been printing money or overdrawing from MMA, leading to a record low value for the Maldivian currency.
The suspension of the fiscal responsibility act in 2020 enabled the government to overdraw MVR 4.4 billion from MMA. The World Bank recently noted that between December 2021 and January 2021, MMA's investments in printed money and government bonds accounted for 47% of MMA's financial assets.
Despite a government circular issued at the beginning of the year aimed at reducing costs due to the state's worsening financial situation, officials have continued to travel abroad and create jobs for political purposes. Additionally, the government is heavily investing in the ongoing by-election in the Guraidhoo constituency.