Yameen says govt's economic measures will hurt the public

Former President Abdulla Yameen has criticised the government’s economic policies, saying measures introduced to address foreign currency pressures will ultimately increase the burden on the public.

Speaking at a People’s National Front (PNF) gathering on Saturday night, Yameen criticised recent changes affecting foreign currency transactions, including the requirement for resorts to convert 40 per cent of their foreign currency revenue and restrictions on international e-commerce transactions using rufiyaa-denominated Bank of Maldives (BML) cards.

The Foreign Currency Act was amended last month to require tourism establishments choosing the revenue-based option to exchange 40 per cent of their monthly foreign currency sales proceeds through a local bank. The government has said the changes are intended to increase the supply of foreign currency through the domestic banking system.

BML, meanwhile, introduced daily allocations for international e-commerce transactions using rufiyaa cards from 13 September. The bank said demand for dollars to settle international card transactions had exceeded the foreign currency available through its funding channels and had also affected other services, including telegraphic transfers. 

Yameen said the government was presenting measures such as the 40 per cent conversion requirement as being in the public interest, but argued that they reflected problems in managing the economy.

He said previous administrations had also managed public debt and foreign currency obligations without requiring resorts to convert such a proportion of their dollar revenue.

Yameen also alleged that the government was seeking to sell a large portion of Ras Malé to investors from Dubai because it needed funds.

“It is simply because they need money. They need the money. There is no other reason,” Yameen said.

He also criticised President Mohamed Muizzu’s remarks at the closing session of the ruling People’s National Congress (PNC) congress, where the President defended the government’s economic policies and said that while some measures may create difficulties in the short term, they would produce benefits in the future.

Yameen rejected that argument, saying he did not believe the measures would produce the outcome described by the President.

“It seems to me that everyone is going to suffer because of what they are doing. I do not believe that the result they are talking about will materialise,” he said.

Yameen said difficulties in obtaining dollars, combined with restrictions on card transactions, were making it harder for businesses to import goods. He said this could increase prices and further affect household finances.

He also warned that prolonged economic pressure could create wider social problems if people found it increasingly difficult to meet their daily expenses.

BML said this month that it had allocated up to USD 16 million a month for international e-commerce transactions on rufiyaa cards, with separate allocations for different categories. The bank said the limits were introduced to manage foreign currency liquidity while maintaining access for essential services.

Yameen also disputed the government’s account of changes in the unofficial dollar market. He said any decline in the exchange rate should not necessarily be attributed to government measures, arguing that some people were instead finding it difficult to obtain dollars.

His remarks come amid continued debate over the government’s foreign currency policies and measures aimed at increasing the amount of foreign currency entering the banking system.