MMA Governor: Pension deal is investment, not printing

Maldives Monetary Authority (MMA) Governor Ahmed Munawwar has described the proposed MVR 2.5 billion pension fund investment in government bonds as an investment opportunity, and pledged to introduce policy changes to ease liquidity pressure on the market.

The transaction, which is still under review, involves the Pension Office proposing to sell existing treasury bills to MMA and reinvest the proceeds into a new government bond. The MMA has not yet executed the investment, contrary to earlier reports suggesting the funds had already been transferred.

Speaking before the Parliament’s Budget Committee on Saturday, Munawwar said the authority is approaching the transaction from an investment perspective and is actively researching monetary policy adjustments to mitigate its impact.

“We are researching. We are taking it from an investment angle. That is, stakeholders have requested us to bring about a change in monetary policy for the liquidity impact,” Munawwar said.

The move has sparked concern among opposition figures and financial experts, who argue that the transaction mimics the economic effects of printing money. Former President Abdulla Yameen Abdul Gayoom criticized the proposal, saying the outcome of the Pension Office investing the funds into government bonds is economically equivalent to printing money. Former Finance Minister Ibrahim Ameer echoed the concern, calling the transaction a violation of the Expenditure Accountability Act.

The controversy is particularly sensitive given President Dr. Mohamed Muizzu’s campaign pledge to avoid money printing. He has repeatedly cited the non-printing of money as one of his administration’s key economic achievements, and blamed the previous government’s monetary expansion for ongoing economic instability.

The Maldives faces significant debt obligations, with USD 1.1 billion due next year alone. International credit rating agencies have downgraded the country’s debt to ‘junk’ status, citing fears of default.

The Finance Ministry has yet to issue an official statement on the proposed transaction.