Ministry of Finance has requested the Parliament of the Maldives to extend the suspension of certain clauses of the Fiscal Responsibility Act by one more year.
The extension of the suspension of certain clauses of the Fiscal Responsibility Act allows the state to overdraw from the accounts of the Maldives Monetary Authority (MMA).
The Parliament first approved the motion to suspend by one year Article 32, section (a), (d), and (e) of the Fiscal Responsibility Act in April 2020. It allowed the government to take long-term loans from MMA in order to manage the cash flow of the country amid the COVID-19 pandemic.
Article 32 states the government is required to pay back loans from the central bank in full within a 91-day period. It also caps the maximum borrowable amount to not exceed 1% of average government revenue over the past 3-year period.
In a letter to Parliament, Minister of Finance Ibrahim Ameer said the suspension of the clauses has allowed the government to manage expenditure and continuously provide its services and assist citizens and businesses to recover from the COVID-19 pandemic. The minister highlighted the country's growth since the pandemic but said there are still major challenges to be overcome.
He requested the Parliament to extend the suspension of the clauses of the Fiscal Responsibility Act in order to allow the government to continue solving the various challenges and provide public services.