Foreign exchange policy tightening put on hold

Central bank has said it has put on hold the implementation of amendments to the foreign exchange regulations citing the global and domestic economic pressures stemming from the Russia-Ukraine war. 

In October last year, it was decided to tighten the rules on foreign exchange to prevent the sale of dollars at exorbitant prices in the black market. The MMA, however, has been delaying the implementation of the new amendments, saying it is yet to be completed completely.

When the Maldives Monetary Authority (MMA) Governor Ali Hashim arrived at the parliamentary budget review committee on Sunday, MPs expressed concern over the move. Responding to these concerns, the governor said:

"At the moment, it is not right to make such drastic changes. If the economy recovers, we have to make big changes like that," the governor said.

The MMA had earlier said that the change in foreign currency rules was largely focused on de-dollarisation or ways to reduce dependence on United States dollar. The MMA had said at the time that it planned to include factors such as reducing the role of foreigners in buying and selling dollars.

The government has also said that the regulations could address the black market.

While the MVR is officially pegged to the dollar at at 15.42, it is generally bought and sold at much higher prices. It is an issue that remains unresolved even if the complaint is high.

Even the permitted money exchanges are selling dollars at MVR 17-19 per dollar these days.