Govt repays MVR 462m out of MVR 3b overdrawn funds
The government earned a record revenue in January this year after tourism recovered post-Covid, MVR 3.4 billion.
By
Ahmed Naaif
At the end of last year, the government has repaid MVR 462.2 million out of MVR 3.9 billion that had been overdrawn from the public bank account to plug the shortfall in government's revenue and expenditure.
Overdrawing the government's main account, the public bank account, means that the MMA prints more money for the government to spend over what it has. Then there is too much money in the economy and the value of money falls.
Therefore, MMA is opposed to printing money, but the implementation was postponed in April 2020 due to Covid-19. Thus:
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Parliament approves overdraw of up to MVR 4.4 billion by the end of this year
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The money withdrawn in the first year was converted into long-term bonds without payment
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MMA has requested parliament to ensure that the government pays back the money that was printed
Data from MMA’s statement of financial position report released on Tuesday show:
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At the end of last year, MVR 3.9 billion had been printed for the government
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However, by January, it had come down to MVR 3.4 billion
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A shortfall of MVR 462.2 million
The number has come down as the government has started paying the earlier withdrawals.
The government has not even asked for more money to be overdrawn
Furthermore, the data suggest that:
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MVR 8.3 billion have been invested in government bonds
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MVR 54.6 million has been invested in T-bills
The government earned a record revenue in January this year after tourism recovered post-Covid, MVR 3.4 billion.
At the end of last year, the state's debt crossed MVR 100 billion. It is estimated that MVR 5.5 billion will be spent on debt servicing during the current fiscal year.
