Minister seeks MVR 6 billion central bank debt waiver
A portion of the money that was overdrawn or printed from Public Bank Accounts (PBA) due to Covid-19 has already been converted into bonds.
By
Ahmed Naif
Finance minister Ibrahim Ameer said on Sunday that the central should write off the state debt amounting to MVR 6 billion accumulated since the 2000s.
MDP's Parliamentary Group (PG) leader and North Hithadhoo MP Mohamed Aslam raised concerns when Ameer arrived at the budget committee session on Sunday for briefings about the budget presented for 2023:
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The financial burden on the government for not restructuring state debt with the Maldives Monetary Authority (MMA)
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Having to pay more than MVR 100 million annually for the interest on the loan alone
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The MP asked if it was considered to restructure the debt with MMA while talking about debt restructuring
Ameer said the long-term bonds worth MVR 6 billion due to MMA should be waived. He said:
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The debt has been inherited by every government for decades
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Talks to waive off the loan should begin
"It's a legacy debt that has been inherited since time immemorial and I think it's in the best interest of the government as well as for the people to get the write-off through consultation with the MMA, the Ministry of Finance and our parliament," he said.
A portion of the money that was overdrawn from Public Bank Accounts (PBA) due to Covid-19 has already been converted into bonds. However, the conversion was approved by the parliament after the MMA had opposed it.
The central bank had also raised concerns over their recommendations for the upcoming budget, because it did not include any mentions of repayments of such an overdrawn amount. It has also been reiterated that the MMA is reluctant to convert such money into bonds.
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The government has overdrawn up to MVR 4 billion this year
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The period allowed for overdrawing will expire by the end of next year
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MMA had earlier refused to extend the overdraw
Ameer said that it is possible to ensure that some of the money invested abroad by banks in the Maldives can be invested in the Maldives through the sale of bonds to MMA. He added that IMF institutions give similar recommendations for managing reserves and foreign exchange.
"It's a very good policy change to bring about," Ameer said.
