Maldives Monetary Authority (MMA) revealed that the government overdrew more than MVR 4 billion over the past four months.
According to June's balance sheet released by the authority, the funds were released through the Public Bank Account (PBA) in order to compensate for the economic shortfalls as a result of the ongoing COVID-19 pandemic.
In June alone, MMA facilitated roughly MVR 3.5 billion to the state, which includes overdrawn funds as well as other expenses.
A majority of the overdrawn funds will be utilized for the government's recurrent expenditures.
As the PBA lacks the required funds to facilitate the overdraft, MMA printed the additional funds, which could result in inflation of the Maldivian Rufiyaa.
The government mostly utilized the PBA for its debt repayments and discontinued the use of PBA to finance state expenditures since 2013.
Maldives has requested the support of the international community as well as foreign financial institutions to provide assistance to the country. As such, Maldives has acquired a total of USD 189.5 million (MVR 2.9 billion) in aid.
As per statistics released by the Ministry of Finance, Maldives has spent a total of MVR 13.5 billion in expenses so far this year. However, the country only generated a revenue of MVR 6.8 billion.
As with numerous countries around the world, amid the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals on March 27, halting the issuance of on-arrival visas. The closure of borders remained in place until June 15.
Heavily reliant on tourism for revenue, the restrictions on international travel left the country vulnerable to severe economic impacts. In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the pandemic.
Maldives estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry.