Pres pledges action in first year of new term to resolve dollar shortage
The president mentioned that a certain percentage of the dollars entering Maldives should be withheld in Maldives.
Aishath Fareeha Abdulla
President Ibrahim Mohamed Solih said on Wednesday that one of his top priorities as he seeks to double the economy will be to address the shortage of dollars and he will start taking steps to address it during the first year of his next term.
Maldives receives USD 6 billion in revenue a year and there should be no reason for the dollar to be in short supply, the president said while meeting with his campaign team during his visit to Addu for next Saturday's presidential runoff.
The president said that the appreciation of the dollar and the need to buy dollars from the black market is a big problem. Although the official rate is MVR 15.42 per dollar, the black market rate has now reached above MVR 17.6 per dollar.
The president said on Wednesday:
His manifesto also includes solutions to the dollar problem faced by the public and businessmen
Maldives's economy is expected to grow from MVR 88 billion to MVR 170 billion
"More than USD 6 billion is coming in as revenue. So there should be no reason for the dollar to be in trouble," he said.
The president said he would implement good policies to ensure that people can get dollars at a good price.
He said he started working on it during this term and noted that he tried to go for dedollarisation as one of the things.
"All domestic trade transactions will be conducted in Maldivian Rufiyaa, which means that those who receive dollars will also have to exchange dollars. Everything they buy and their salaries will have to be paid in Maldivian Rufiyaa. Any tax will have to be paid in Maldivian Rufiyaa," he said.
The president added:
If such a rule is established by the central bank, commercial banks will have dollars
As a result, the economy will have enough dollars
He consulted with senior officials working in the tourism sector to bring about this change
Secondly, the president mentioned that a certain percentage of the dollars entering Maldives should be withheld in Maldives.
"30% should be withheld in Maldives for a certain period of time. We have almost reached an agreement. We need to provide legal assurances to the businessmen," he said.
"That means that 30% of the deposit will be available within a certain period of time."
The president said that many of the local investors have borrowed from abroad and if the government can legally guarantee that they will receive the dollars when they have to repay the loans, the dollar shortage can be resolved.
"We are working on it. If this assurance is given to the businessmen, this is no problem," he said.
The president said that even if 30% of the dollar entering Maldives is retained in Maldives, the value of the dollar will be brought below MVR 15.
“Hopefully in the next term, we will start implementing one of these options within the next year as soon as we are elected,” he said, noting that with that, there would be a permanent solution to the dollar shortage.