MMA Governor Warns Budget Deficit Increase a Growing Concern

Governor of the Maldives Monetary Authority (MMA) Ahmed Munawar has said that the increase in the budget deficit is a matter that needs to be concerned about, even though this year's budget is smaller than last year's. Speaking at the People's Majlis Budget Committee, the Governor said that an increase in the deficit will increase the state's debt every year, and therefore the matter needs attention. "Similarly, budget financing is also a very important matter. It is a very important matter for the government to carry out more efforts for financing than now. A large portion during this year too was included within financing. Therefore, during this year too, we will advise the government, and more foreign financing also needs to be sought," said Governor Ahmed Munawar. The Governor said that resolving the dollar shortage facing Maldives, reducing the gap between the official exchange rate and the black market, and bringing the economy into balance depends on the Middle East war stopping and oil prices settling. Noting that the largest expenditure from Maldives' official reserves is for the import of food and oil, the Governor said that the biggest constraint on the reserves is the extreme rise in oil prices in the world market due to the war. According to the Governor, so far this year, 517 million dollars alone has been released from the official reserves to STO for the purchase of oil. This is a very large amount when looking at the entire reserves. The Governor said that a large portion of the dollars being spent will begin to be released to selected banks starting next week. Through that, he said, avenues will open for businesses to obtain dollars for TT and other needs. Additionally, the Governor said that if foreign financing is obtained for Maldives and a solution is reached to the war ongoing on the world stage, it will become easier for MMA to enter the market and resolve the dollar issue.