Ilyas calls president a ‘bluff master’, warns dollar rate could reach MVR 30

Former MP Ilyas Labeeb has criticised President Mohamed Muizzu’s economic policies, calling him a “bluff master” and warning that the parallel market exchange rate for the US dollar could rise to MVR 30.

Speaking at a Maldivian Democratic Party (MDP) rally at the party headquarters on Wednesday night, Ilyas accused the government of failing to address the country’s fiscal and foreign exchange problems.

Ilyas, who contested the 2023 presidential election as the candidate of The Democrats and now serves on the MDP’s Macroeconomic Committee, said the government had relied on announcements instead of addressing economic problems.

“A bluff master. He is an absolute bluff master. President Muizzu is a bluff master,” Ilyas said.

He cited government announcements on projects including a monorail connecting Malé and Velana International Airport, a bridge in Addu, transshipment ports and investment banks.

Ilyas said several announcements had yet to produce results, describing some government events as “writing a name on a piece of cloth and cutting a ribbon”.

He also criticised the government’s handling of changes to Bank of Maldives (BML) foreign currency card limits in August 2024.

At the time, the government accused individuals within the bank of attempting to undermine the administration after BML announced changes to foreign currency limits on cards linked to rufiyaa accounts. Police subsequently opened an investigation.

“The President held a press conference claiming Bank of Maldives was attempting a massive coup. The police stepped up and announced an investigation into a coup. Yet today, there is nothing. It was proven not to be a coup,” Ilyas said.

He also criticised subsequent changes to the BML board, alleging that the government had removed people from the bank’s leadership and brought the institution under the President’s control. He cited the appointment of the Cabinet Secretary as BML Chairman as part of his argument.

Ilyas also criticised the government’s foreign exchange policy, particularly requirements for businesses earning foreign currency to convert part of their revenue through local banks.

He said the parallel market rate had risen from about MVR 17.90 per US dollar to around MVR 23 after the government introduced a 20 per cent foreign currency conversion requirement.

Ilyas warned that the increase in the resort revenue conversion requirement to 40 per cent could place further pressure on the parallel market.

He said the rate could reach MVR 30 per dollar if the underlying causes of the shortage were not addressed.

The Foreign Exchange Act amendments that came into force this week require resorts to convert 40 per cent of their monthly foreign currency revenue through local banks. The previous revenue-based requirement was 20 per cent.

The government says the measure will increase the amount of foreign currency entering the banking system and improve access to dollars.

Ilyas disputed that approach, arguing that the main problem was the amount of rufiyaa liquidity in the economy.

He claimed there was about MVR 80 billion in liquidity seeking access to foreign currency, equivalent to demand of about USD 5.2 billion at the official exchange rate.

Ilyas attributed the increase in liquidity to government financing through the Maldives Monetary Authority (MMA), pension funds and borrowing from commercial banks. He argued that government borrowing was also reducing financing available to private businesses.

Ilyas said state-owned enterprises, including Maldives Airports Company Limited (MACL), Housing Development Corporation (HDC) and State Trading Organisation (STO), were also facing difficulties obtaining foreign currency for debt payments and imports.

He called for information on funds from MACL that he alleged had been used to make payments to foreign contractors involved in the Rasmalé land reclamation project.

Ilyas said an MDP government elected in 2028 would investigate transactions related to the project.

Comparing the current administration with that of former President Abdulla Yameen, Ilyas said: “Under President Yameen’s government, we used to say, ‘the bridge is fine, but corruption is bad.’ Today, there is nothing good we can point to. There are no results — only corruption and waste.”

He did not provide evidence at the rally to substantiate allegations of corruption.

Ilyas called on the government to stop imposing penalties on businesses that face difficulties complying with foreign currency conversion requirements.

He proposed restructuring external debt and negotiating grace periods with creditors as measures to address the country’s financial position.

Ilyas also called for reductions in government expenditure, including a freeze on political appointments, and urged MPs to exercise parliamentary oversight over economic and fiscal policy.

He concluded by calling on the government to hold discussions with opposition parties on measures to address the country’s economic and foreign exchange problems.