The administration has halted the practice of debt monetisation President Mohamed Muizzu said on Saturday evening while speaking at the Huravee Day event. Muizzu said the administration had forged ahead to realise their goals even within the first four weeks and went on to reassure the public that his administration would achieve the ‘Week 14’ pledges as stated.

Huravee Day commemorates Sultan Hassan Izzuddeen who, in 1752, liberated the Maldives from a Malabar occupation.

In his speech, the President said that debt monetisation has been halted as he promised during the launch of his ‘Week 14’, or first 100 days, pledges.

“The state stopped debt monetisation as soon as we started running the government,” he said.

The administration does not want to extend permission, given by Monetary Authority of Maldives (MMA), for debt monetisation or to overdraw from public accounts, Minister of Finance Mohamed Shafeeq had previously informed the Parliament.

Under the Fiscal Responsibility Act of 2013, the central bank, MMA, limits the amount of debt that can be taken on by the government, however, at the request of the government, Parliament exempted the application of the relevant provision of the Act for a certain period, from April 2020 till end of 2023.

Minister Shafeeq, in his letter to the Parliament, requested that as the ‘natural disaster’ exemption listed in Article 36 of the Fiscal Responsibility Act no longer applied, the exemption should be removed effective 1 January 2024 with all provisions of the Act fully restored.

The overdraft from the public bank account will be securitised and converted into long-term bonds.

The Solih administration, in the face of the COVID pandemic oversaw a debt monetisation of over MVR 4.4 billion, initially starting in 2020.