No economic reform suggestion from MMA, finance minister says

The Maldives Monetary Authority (MMA) has not taken the initiative to advise the government on strengthening the country's financial and economic affairs, Finance Minister Dr Mohamed Shafeeg said on Monday.

Shafeeg said this in a letter to the parliament, while the parliament is in the process of removing him.

The matter was referred to the Public Accounts Committee on July 2 for consideration. Shafeeg sent a written reply on July 8 to the parliament's request for clarification on the matter.

“The Monetary Authority of Maldives has not taken the initiative to issue any advice on strengthening the financial and economic affairs of the state since 17 November 2023,” Shafeeg said in his letter.

However, a meeting was held between the MMA and the Finance Ministry late last year to discuss the importance of exchanging information and conducting policy-level consultations between the two institutions, the letter added.

“In the meeting the Ministry of Finance requested MMA to better regulate the foreign currency exchange business,” Shafeeg said in the letter.

"In addition, it should also be noted that the Authority had initiated technical meetings with the Ministry on strengthening the foreign exchange market”.

Shafeeg said the central bank and the ministry should continue to consult on matters that may pose a challenge to the state finances.

However, he noted that the most desirable efforts to harmonise fiscal and monetary policy have not been made in the long history of the country.

“The recent decision of MMA to raise the minimum reserve requirement (MRM) to be maintained by commercial banks in the authority became a setback to the finance ministry's ongoing financial transactions with commercial banks. Based on the meetings held between the two institutions in this regard, mma has now come up with solutions to the issue,” Shafeeg wrote.

In addition, the technical work required to formulate fiscal and economic policy is being carried out through the Macroeconomic Policy Coordination Committee (MEPCC) comprising the MMA and the Finance Ministry, he said.

The Public Accounts Committee scheduled a meeting on Monday for the governor to respond to the issue, but he did not attend due to illness. However, he responded in writing and denied the allegations.