Halting Debt Monetisation Won’t Affect Cash Flow if Revenue Forecasts Are Met: Finance Ministry

The Ministry of Finance stated that cash flow will not be affected if revenue forecasts are met, following the Muizzu administration's decision to halt debt monetisation. The practice, initiated during the pandemic by the Solih administration with MDP majority in parliament, allowed overdrawing from public accounts. The Solih administration overdrawn MVR 8.2 billion over three years. The new administration decided not to extend consent to overdraw under emergency conditions. Chief Financial Budget Executive Ahmed Saruvash Adam said that since the MVR 2 billion ceiling was reached, there was no space for overdraft; if revenue matches budget, cash flow management is feasible. Parliament approved a budget of MVR 49.8 billion for 2024 with a deficit of MVR 16.3 billion, financed by borrowing MVR 10.4 billion externally and the rest internally. A supplementary budget of MVR 42.8 billion was submitted in 2023. The overdrawn amount has been securitised into a long-term bond to the Maldives Monetary Authority.

The Ministry of Finance stated that cash flow will not be affected if revenue forecasts are met, following the Muizzu administration's decision to halt debt monetisation. The practice, initiated during the pandemic by the Solih administration with MDP majority in parliament, allowed overdrawing from public accounts. The Solih administration overdrawn MVR 8.2 billion over three years. The new administration decided not to extend consent to overdraw under emergency conditions. Chief Financial Budget Executive Ahmed Saruvash Adam said that since the MVR 2 billion ceiling was reached, there was no space for overdraft; if revenue matches budget, cash flow management is feasible. Parliament approved a budget of MVR 49.8 billion for 2024 with a deficit of MVR 16.3 billion, financed by borrowing MVR 10.4 billion externally and the rest internally. A supplementary budget of MVR 42.8 billion was submitted in 2023. The overdrawn amount has been securitised into a long-term bond to the Maldives Monetary Authority.

The Ministry of Finance stated that cash flow will not be affected if revenue forecasts are met, following the Muizzu administration's decision to halt debt monetisation. The practice, initiated during the pandemic by the Solih administration with MDP majority in parliament, allowed overdrawing from public accounts. The Solih administration overdrawn MVR 8.2 billion over three years. The new administration decided not to extend consent to overdraw under emergency conditions. Chief Financial Budget Executive Ahmed Saruvash Adam said that since the MVR 2 billion ceiling was reached, there was no space for overdraft; if revenue matches budget, cash flow management is feasible. Parliament approved a budget of MVR 49.8 billion for 2024 with a deficit of MVR 16.3 billion, financed by borrowing MVR 10.4 billion externally and the rest internally. A supplementary budget of MVR 42.8 billion was submitted in 2023. The overdrawn amount has been securitised into a long-term bond to the Maldives Monetary Authority.

This story involves 1 source and may affect public understanding of debt monetisation / budget.