MDP submits resolution seeking Parliament’s opinion on money printing plan

The main opposition Maldivian Democratic Party (MDP) has submitted a resolution seeking to gauge the opinion of parliamentarians regarding the government’s plan to print around MVR 15 billion through the central bank.

 The resolution, which was submitted by South Hulhumale’ MP Dr. Ahmed Shamheed on March 10, has been set in the agenda for Tuesday’s parliamentary sitting.

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 the Maldives Monetary Authority (MMA) for a price of MVR 14 billion – MVR 15 billion.

On March 9, President Muizzu hosted lawmakers from the ruling People’s National Congress (PNC) at the presidential palace, Muliaage, to discuss the plan.

According to Shamheed, his resolution seeks the opinion of parliamentarians regarding the move – which he said is in violation of the 2025 state budget passed by the Parliament.

In his resolution, Shamheed referred to constitutional provisions and said that the government cannot spend beyond the budget passed by the Parliament without its approval, and nor can the government deviate from the budget plan by spending the funds allocated for a specific thing on something else.

Shamheed said that he has been informed that the MMA’s board has decided, in violation of the duties and responsibilities charged of the MMA under law, to purchase land from HDC in order to give funds to the government through the corporation.

He said that there is no acceptable reason why the MMA should be procuring land or buildings beyond their administrative needs, and there is high probability for hidden motives behind the transaction.

This move is in violation of the Fiscal Responsibility Act, he said.

Shamheed warned the move could lead to the loss of MMA’s independence, a consequence of which will be the loss of credibility of Maldives’ entire financial system.

He said the move will also weaken the Maldivian Rufiyaa, sharply increase the foreign exchange rate, and fuel inflation.

Shamheed asked for the opinion of parliamentarians in the matter, citing the Parliament’s legal mandate to hold the government accountable.

The plan to print MVR 15 billion has been met with concern not just from the opposition, but also from economists.

The MMA’s board has seen several resignations since news of the money printing plan broke out. This includes deputy governor Ahmed Imad, who resigned on Monday after warning of “serious macroeconomic consequences” of printing more money in the current delicate economic situation.

Meanwhile, Ahmed Zayan Mohamed, the head of Finance Ministry’s Fiscal Affairs Department tendered his resignation on March 10, while Shuhad Ibrahim, a Consultant at the Economic Ministry, resigned the next day.

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 ruling People's National Congress (PNC) administration in the past.

President Muizzu repeatedly blamed the Maldives’ current economic crisis on the “poor decisions” of the MDP administration, including the decision to print money. He said his administration would improve the Maldivian economy without resorting to money printing.

However, government officials have refused to comment on the plan to raise MVR 15 billion with the sale of land.