Parliament passes fiscal responsibility, debt bills
This marks a 1.5% increase from the current law, which caps borrowing at 1% of the average revenue.
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Parliament on Wednesday passed the Fiscal Responsibility Bill and the Public Debt Bill, two of 37 bills the government announced for introduction during the current session.
Both bills were initially approved by the parliamentary finance committee with 81 votes in favour before being forwarded to parliament with minor amendments.
The Fiscal Responsibility Bill is set to replace the existing Public Expenditure Accountability Act. Under the new bill:
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Funds borrowed will need to be repaid within three months at market interest rates.
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Borrowing will be capped at 2.5% of the government’s average annual revenue over the past three years.
This marks a 1.5% increase from the current law, which caps borrowing by the central bank to address cash flow issues at 1% of the average revenue over the same period. The repayment period, however, remains unchanged at three months.
Both bills aim to enhance financial governance and provide a framework for managing public debt in the Maldives.
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