Hulhumale' South MP Ahmed Shamheed has warned that the value of the Maldivian Rufiyaa would plunge if the government's proposed MVR 64.2 billion budget for 2026 is passed without changes.
During the budget debate, Shamheed said the government needs to raise MVR 26 billion to cover its expenditure next year. If the government fails to raise the money, it will resort to money printing, he said.
"We predict an additional MVR 2 or 3 billion will be printed next year. The danger we face is approving the budget as it is. If we start spending, the Rufiyaa may collapse altogether. It could become worthless," Shameed said.
He added that this is not the way a country's finances should be run responsibly. Recurrent expenditure will increase by MVR 8 billion next year compared to this year, he said, adding that this is enough money to pay the looming sukuk.
The government plans to raise most of the money next year through external loans, the sale of bonds or securities and multilateral and bilateral financing. MVR 16.8 billion is planned to be raised externally.
A large portion of the externally raised funds will be used to refinance sukuk. Finance Minister Moosa Zameer said USD 450 million or MVR 6.9 billion will be raised to pay sukuk.
An additional USD 300 million or MVR 4.5 billion is being sought in budget support. Zameer indicated that this money had been arranged through President Mohamed Muizzu's overseas trips.
Planned arrangement of financing
- Total - MVR 26.2 billion
- External - MVR 16.8 billion
- Domestic - MVR 5 billion
- Sovereign Development Fund - MVR 4.2 billion
The government plans to raise only MVR 5 billion from the domestic market next year. However, this year and the previous year, the budget expenditures were financed by selling T-bills and bonds in the domestic market.
The government has also decided to use the money in the Sovereign Development Fund to repay loans. Zameer said the fund already has USD 100 million (MVR 1.5 billion) in cash.
