Ameer criticises new dollar policy, warns of rising black market rates
MMA introduced new regulations on foreign exchange and money-changing businesses on October 2.
Former finance minister Ibrahim Ameer said on Tuesday that the government's new policy on foreign exchange is contributing to an increase in the dollar's value on the black market.
The Maldives Monetary Authority (MMA) introduced new regulations on foreign exchange and money-changing businesses on October 2 to regulate foreign currency transactions.
Under the new rules, a portion of foreign currency income must be exchanged to Maldivian rufiyaa within a specific timeframe. The rules include:
-
Category A tourism service providers, such as resorts, must exchange $500 per tourist arrival for the month by the 28th of the third month following the relevant period.
-
Category B tourism service providers, such as guesthouses, are required to exchange $25 per tourist in the same manner.
Speaking at a press conference at the Maldivian Democratic Party (MDP) office, Ameer warned that if the government's demand for dollars, along with that of state-owned companies, increases, private businesses will receive fewer dollars. This, he argued, could worsen the black market for foreign currency.
"If dollar sellers believe that the rate will drop in the black market in the future, they will sell at a higher price due to this policy. The situation is leading to a rise in black market dollar rates," Ameer said.
He also highlighted that the dollar has been consistently higher throughout 2024 compared to the previous two years, despite this year being one of the strongest for the tourism industry.
According to Ameer's statistics:
-
In 2022, the dollar rate ranged between MVR 17.50 and MVR 18.
-
In 2023, the dollar rate fluctuated between MVR 17 and MVR 17.5.
-
In 2024, the dollar has been between MVR 18 and MVR 18.64.
Ameer expressed concern that the new dollar exchange policy could negatively impact tourism. He noted that foreign investors may become hesitant, leading to a reduction in domestic investment. Additionally, he warned that the time it takes to recover business expenses, currently around seven years, could be extended.
He urged the central bank to improve its intervention policies and ensure that all foreign currency is allocated to banks. Ameer noted that the dollars collected by the state under the new policy are expected to be used for government expenses and debt repayment.
