Investing in government T-bills through Pension Fund via MMA is equivalent to printing money: Shahid

Former Foreign Minister Abdulla Shahid has stated that the Maldives Monetary Authority's (MMA) use of the Pension Fund to invest in government T-bills is equivalent to printing money.

In a post shared on social media, Shahid stated that investing in government T-bills is equivalent to the direct printing of money. He warned that this would drive up inflation, further devalue the Maldivian Rufiyaa, and lead to severe dollar shortages and skyrocketing exchange rates. Shahid further asserted that printing 2.4 billion Rufiyaa—disregarding the ongoing resignations of Pension Office board members and senior staff—is an act that jeopardizes the future of the citizens and undermines the country's entire financial system.

Shahid further noted that President Muizzu assumed office with a pledge to cease printing money. He expressed regret that the President has since reneged on this promise, acting in a manner that inflicts significant damage on the financial system.

In addition to Shahid, economic experts have also been expressing concern over the government's fiscal decisions, urging them to reconsider their current course of action. Amidst these concerns, Haifa Ahmed, the Head of Investment at the Pension Office, along with two other management-level employees, resigned earlier today. While the Pension Office has not officially disclosed the reasons behind these sudden resignations, it has now been confirmed that the departures of these three senior officials are directly linked to the recent bond purchase transaction.

In connection with this matter, the CEO and CFO of the Pension Office, along with the Board Chairperson and several board members, have previously resigned from their positions. Amidst escalating tensions surrounding the issue, the management issued a memo today warning that any employees who disclose information regarding the matter will face dismissal. According to available information, despite widespread public concern, the newly appointed board and leadership of the Pension Office are currently working to finalize the transaction later today.

The resignation of three senior employees from the Pension Office comes amid reports that final preparations are underway for a controversial transaction initiated last year. This deal involves liquidating 2.4 billion Rufiyaa worth of T-bills held by the Pension Fund to reinvest the proceeds into long-term government bonds—a move that serves as a stark indication of public dissatisfaction with the government's economic policies.