The People's Majlis has on Sunday morning approved the one-year extension requested by the Ministry of Finance to the period through which the state may continue to unlimitedly obtain funds from the Maldives Monetary Authority (MMA).
On Thursday, a temporary parliamentary committee established to review the issue had voted in favor of granting the overdraft extension, after a number of meetings through which a report was prepared over the present state of the overdraw. On Sunday morning, the People's Majlis voted on the report compiled by the committee, with 47 out of 53 parliamentarians in attendance voting in favor of the report. Four parliamentarians voted not in-favor of the report's findings.
The Ministry of Finance had requested an extension period for an overdraw taken from the Maldives Monetary Authority on 26 April 2020, which totals MVR 4.4 billion. In requesting the extension last week, Minister of Finance Ibrahim Ameer had stated that while the one year period initially given by parliament was almost over, and that the Maldives remained strained financially and economically due to Covid-19.
Minister Ameer had noted the Maldives was not financially capable of following Article 32 of the Fiscal Responsibility Act, and that attempting to enforce it would result in disruption of the economy and challenges in managing cash-flow for the state. He added that the economic impact of Covid-19 would exclude the state from certain legal provisions as under Article 36 of the Fiscal Responsibility Act.
The overdraft extension granted by the People's Majlis to the Ministry of Finance on Sunday morning is contingent on the fact that the overdraw does not exceed the MVR 4.4 billion recorded at present. At the committee-stage, MMA Governor Ali Hashim and Auditor General Hassan Ziyath were present as stakeholders discussed a potential interest plan for the repayment of the overdraft, as a way to incentivize the state into paying the overdraft within the given time frame despite economic downturns caused by Covid-19, in addition to a payment review process.
