The ruling People's National Congress (PNC) MPs on the budget committee have refused to include the recommendation of Maldives Monetary Authority (MMA) Governor Ahmed Munawar as a recommendation for the proposed state budget for 2026.
The committee passed the budget of MVR 64.2 billion without any changes at a meeting held on Wednesday. At the meeting, Hanimaadhoo MP Abdul Ghafoor Moosa proposed to include Munawar's recommendation in the budget.
“I propose to include the technical advice given by the MMA Governor as a budget recommendation when the budget is passed,” Ghafoor said.
But his proposal was rejected by the PNC MPs.
During the review of the proposed state budget, Munawar appeared before the committee and expressed concern over some of the policies set by the government for next year.
He warned that it would be difficult to maintain the official dollar rate if the government decides to increase the salaries of all the employees at the same time to implement pay harmonisation.
“When such a large percentage of the budget is increased by about I would say three billion, when salaries increase, our most important advice is to split it up, meaning don't do it at the same time. If this is done, we could face the pressure," he told the committee.
"Especially in our foreign exchange market, the pressure could increase more."
Recurrent expenditure accounts for 62 percent of the MVR 64 billion budget proposed by the government.
Munawar further said the MMA receives foreign currency from taxes collected by the Maldives Inland Revenue Authority (MIRA) and money received under the Foreign Exchange Revenue Act. He added that foreign funds are also received in the form of loans from various foreign sources, but the amount of foreign aid received in the past two years has been very low.
He said the foreign exchange services are not being provided properly and that the central bank will be able to do it right when the reserves increase.
Munawar said the pressure on the market could be reduced by increasing the amount of foreign exchange transactions by the MMA.
