Maldives’ central bank Maldives Monterey Authority (MMA) said if the securing of foreign funds do not proceed as allocated, it would be difficult to obtain financing.
Regarding the MVR 6.5 billion submitted by the government as the supplementary budget, MMA said they faced difficulties in obtaining the foreign funding they had decided to collect. The increase in fuel and oil prices in the global market has affected Maldives’ reserves as well, they said.
“It is important to obtain the predicted MVR 4.2 billion before the year is over for financing government expenses. If this amount is not obtained, it will be difficult to sustain the Maldives’ reserve at a particular amount, so we recommend to guarantee financing [for this purpose],” they said.
At the beginning of 2022, Maldives’ reserve was at USD 254 million. However the reserve has fallen to USD 126 million by September.
MMA has said that while they need MVR 4.2 billion from foreign parties for the supplementary budget, there are big obstacles in obtaining the amount. They said they had to resort to selling T-bills in the domestic market, in addition to overdrawing from PBA as they failed to raise that amount.
When the MVR 4.2 billion that was printed this year is converted to bonds, and if an extra MVR 2 billion is printed before the year is over, the total printed amount will come up at MVR 6.2 billion.
MMA said major steps have to be taken to decrease deficit as well. They also encouraged to prioritize capital projects and to only undertake projects for which financing has already been arranged.
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