MDP warns of impending 'economic disaster' with govt’s MVR 15bn money printing plan

Former finance minister Ibrahim Ameer, a senior politician from the main opposition Maldivian Democratic Party (MDP), warned on Monday that the People’s National Congress (PNC) administration is pushing the Maldives to the brink of an economic disaster with its plan to print MVR 15 billion.

The MDP held a press conference on Monday afternoon expressing concern over reports that the incumbent administration plans to raise MVR 15 billion by selling a plot of land from Hulhumale’ to the Maldives Monetary Authority (MMA).

Speaking to reporters, Ameer warned the move to print money would cause irrevocable damage to the Maldivian economy.

He said the deal isn’t just a mere real estate transaction, but an act of monetary financing or printing money that raise inflation and further weaken the Maldivian Rufiyaa.

“Because the government hasn’t managed to generate a single dollar, it is now trying to get the money they need from the domestic market however way they can. The government had managed last year’s budget by using the cashflow of state-owned enterprises, by having the Bank of Maldives invest in treasury bills, and by investing in amounts higher than usual and through other different means,” he said.

Ameer said that the PNC administration is “forcing” the MMA to violate its core mandate and is “pushing the country’s economy to the brink of a disaster for political gain.”

He told reporters after the press conference that the MMA had already paid the advance for the land.

During his 2023 presidential campaign, President Dr. Mohamed Muizzu vowed he would never print money, as his predecessor had resorted to during the Covid-19 pandemic. He repeatedly reiterated this pledge after coming to power, and listed avoiding printing money as one of the biggest achievements of his administration in its first year.

However, Sun has been informed that the administration is engaged in negotiation on selling a large plot of land from Hulhumale’ that is under the management of the Housing Development Corporation (HDC) to MMA for a price of MVR 14 billion – MVR 15 billion.

On Sunday evening, President Muizzu hosted lawmakers from the ruling PNC at the presidential palace, Muliaage, and discussed the plan.

Some economic analysist who spoke to Sun believe the administration is working on raising money to repay the staggering debt obligations due this year.

According to data shared by former President Mohamed Nasheed, the Maldives has a staggering USD 800 million (approximately MVR 12 billion to MVR 13 billion) in debt repayments due this year. This includes USD 150 million due by the end of March, and another USD 25 million in April.

The MDP administration had printed MVR 8 billion due to the economic downturn during the Covid-19 pandemic. The former administration claims it resorted to printing money because it was left with no other choice to a complete cease in economic activity after the country’s airports were shut down.

But the move was widely slammed by the PNC administration in the past.