Central Bank, Maldives Monetary Authority has released MVR 2.7 billion from the public bank account for the increased government expenditure due to COVID-19.
A public account overdraft is when the MMA releases more funds for the government than the amount that is in the state account. The overdraft means that more money will be in circulation within the economy.
MMA’s financial statistics show that the funds were released up until May 26 as an overdraft.
Out of the MVR 2.7 billion released so far, MVR 828 million was released before April 29.
The overdraft was permitted after the Parliament approved a request by the Finance Minister regarding the state expenditure needed to combat and control the spread of COVID-19 in the Maldives. The Parliament also increased the overdraft limit to MVR 4.2 billion upon the request of the Minister.
The funds withdrawn until May 26, totaling MVR 2.7 billion was the amount requested by the government, which means that the state has MVR 1.5 billion yet to be withdrawn.
Finance Minister has previously said that the overdraw does not necessarily mean printing more money. He described the move to overdraft the state account through MMA as “monetizing” to manage the government cashflow.