Parliament approves motion to borrow MVR 4 bln from central bank

Parliament approves motion to borrow MVR 4 bln from central bank

The Parliament on Sunday approved to suspend some articles of the Fiscal Responsibility Act to allow the government to borrow MVR 4.4 billion from the central bank to manage state cashflow. The motion was passed by the parliament with votes from 60 members. Seven members voted against the motion.

Last week, the Finance Ministry requested the suspension of some clauses of the Fiscal Responsibility Act in order to effectively manage state finances in the face of the current COVID-19 pandemic.

Minister Ibrahim Ameer said the government is requesting for an exception from subsections a) d) and e) of article 32 of the Fiscal Responsibility Act in order to increase the overdraw limit of the public bank account. While the law stipulates that an amount equivalent to 1% of the state's average revenue may be borrowed from the central bank, which amounts to approximately MVR 2 million, the current circumstance faced by the country is exceptional, and the government therefore wishes to increase the cap from MVR 2 million to MVR 4.2 billion, said the minister.