Government seeks to remove borrowing limits from MMA
28 Apr 2014, 20:58
Ahmed Rilwan
The government has submitted an amendment to the Fiscal Responsibility Act to scrap borrowing limits from the Maldives Monetary Authority (MMA).
The amendment was proposed to remove all limitations on government borrowing imposed by article 32(a) of the law and authorise the central bank’s board of directors to make decisions concerning lending in consultation with the Minister of Finance and Treasury.
The act stipulates that money borrowed from the MMA must be repaid within 91 days at an interest rate that is not lower than the market rate at the time.
The article also sets limits on the amount that can be borrowed, which must be no more than one percent of average government revenue (based on the previous three years).
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