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President speaks at Monday's PNC gathering. (Photo/PNC)

Rule revisions to require bank dollar exchange, president says

The president said he has advised the Maldives Monetary Authority (MMA) to amend some of its rules to resolve the dollar shortage.

27 August 2024

Central bank will change its rules to prevent companies earning foreign currency or dollars from exchanging the currency in the black market and require them to exchange the currency via banks, President Mohamed Muizzu said Monday.

The president made the remarks at a gathering held at the ruling PNC camp Monday evening.

Some of the details of the decisions were disclosed at a press conference held at the President's Office on Sunday. The president said he has advised the Maldives Monetary Authority (MMA) to amend some of its rules to resolve the dollar shortage.

The president said the rules to be amended include:

  • MMA monetary regulations

  • Money exchangers rules

  • Foreign direct investment rules

  • Business profit tax regulations

"There are a lot of businesses in our country that earn foreign currency. The change in the money exchangers regulation will put an end to this exchange of the money in the black market and require the banks to exchange it," he said.

The president said the amendments to the MMA rules could "anger a lot of people". However, he said he was on the side of the people.

Regarding the further amendments to be introduced, the president said:

  • Amendments to encourage retention of profits from foreign direct investments in Maldivian banks

  • This will keep the dollar in the country for a long time

The president said it would take time for these decisions to pay off. He also asked for the cooperation of the people in these matters.

"Most foreigners run money exchanges too. If these places make these exchanges, if they are going to mark dollars above the bands announced by the bank, people will not go there. It will be much better regulated and then dollars will be available," he said.

"So, if everyone cooperates, everyone does this for each other, if businessmen and the public cooperate, the dollar black market will be largely stabilised, the dollar rate will be maintained and reduced, and dollar reserves will be increased."

The president reiterated the decisions taken at a press conference held after the cabinet meeting on Sunday. These include:

  • Dollar-denominated businesses must pay taxes and import duties to the state in dollars

  • Pensions of employees paid in dollars should also be deposited in dollars

"These are [measures taken]. There will be no difficulty for the general public. It is also a convenience for those who earn dollars and trade in dollars. It will be easier for them to go to the market and earn rupees," he said.

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