Parliament Has Given Green Light To Extend The Government’s Overdraft Period By Another Year

Last week the Government sent a request to the Parliament requesting the extension of the period of a financial overdraft taken to cover the expenses of the government by a year citing that the country’s economy has still not recovered from the negative impacts of the Covid-19 pandemic. Following this, a parliamentary committee was set up to review the request whereas the committee upon review has unanimously approved to extend the deadline.

The committee’s report was then sent to the Parliament’s floor in order to come to a final verdict on the matter. In a sitting held today, the Parliament passed the report with a majority vote of 47 out of 51 parliamentarians in attendance. The approval of the extension means that the overdraft period has now been extended until 26^th April 2022.

Due to the financial crisis at the onset of the pandemic, the Parliament has granted approval to suspend some clauses of the Act for a year back in 26^th April 2021 – meaning the government would be able to obtain the funds from the central bank without any limits. Following this, the government was approved the withdrawal of MVR 4.4 billion from the central bank.

The decision by the Parliament members was taken even after the central bank has warned that exceeding MVR 4.4 billion will result in irrevocable losses to the economy, forcing changes to the foreign exchange rate, and raise the inflation rate during consultations held with the committee.
 
(Photo: Majilis)