Maldives Monetary Authority (MMA) Governor Ahmed Munawwar has described the recent MVR 2.5 billion transaction involving the Pension Fund as an investment, and pledged to introduce policy changes to ease liquidity pressure on the market.
The MMA invested MVR 2.5 billion into the Pension Fund, which is now being reinvested by the Pension Office into government bonds. The move has sparked concern among opposition figures and some financial experts, who argue that the transaction mimics the economic effects of printing money.
Speaking before the Parliament’s Budget Committee on Saturday, Munawwar said the authority is approaching the transaction from an investment perspective and is actively researching monetary policy adjustments to mitigate its impact.
“We are researching. We are taking it from an investment angle. That is, stakeholders have requested us to bring about a change in monetary policy for the liquidity impact,” Munawwar said.
While government officials maintain that the transaction does not constitute money printing, the Finance Ministry has yet to issue an official statement on the matter.
Former President Abdulla Yameen Abdul Gayoom criticized the move, saying the outcome of the Pension Office investing the funds into government bonds is economically equivalent to printing money. Former Finance Minister Ibrahim Ameer echoed the concern, calling the transaction a violation of the Expenditure Accountability Act.
The controversy is particularly sensitive given President Dr. Mohamed Muizzu’s campaign pledge to avoid money printing. He has repeatedly cited the non-printing of money as one of his administration’s key economic achievements, and blamed the previous government’s monetary expansion for ongoing economic instability.
The Maldives faces significant debt obligations, with USD 1.1 billion due next year alone. International credit rating agencies have downgraded the country’s debt to ‘junk’ status, citing fears of default.