MATATO calls on governor to resign over dollar shortage
MATATO said that the MMA, the parent body of the financial sector, has neglected to take strong measures to stabilise it for many years.
By
Ahmed Naif
Maldives Association of Travel Agents & Tour Operators (MATATO) has called on the incumbent Governor Ali Hashim to resign, saying the failure of the central bank, Maldives Monetary Authority (MMA) has affected businesses and the economy.
MATATO on Sunday issued a statement expressing concern over the stagnant dollar supply.
In its statement, MATATO called on the government and relevant agencies to take immediate steps to stabilise the dollar market.
MATATO said in a statement that one of the reasons why the dollar crisis has reached this point is that the MMA, the parent body of the financial sector, has neglected to take strong measures to stabilise it for many years. With concern, MATATO said the current Governor Ali Hashim should be held responsible.
"Expressing disappointment with the Maldives Monetary Authority (MMA) for its failure to address and resolve the ongoing dollar crisis in recent years, MATATO highlights the regulator's inadequate performance. The Association Calls for the resignation of the Governor of MMA, stressing the importance of effective regulatory oversight in maintaining financial stability and ensuring the economic well-being of the Maldives", the statement read.
Government spending is high and dependent on banks
Another reason for the dollar shortage noted by MATATO is that government spending is many times higher than it can sustain. As a result, MATATO said the state has had to rely on banks to raise funds for government expenditure. MATATO added:
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Instead of providing dollars to businesses, banks have to invest in government bonds
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This way of redirecting funds towards bonds has made it very difficult for businesses to get dollars
Therefore, MATATO has called on the government to expedite reform measures.
“In response to these urgent concerns, MATATO urgently calls upon the Maldivian government to take immediate and decisive action to address the dollar crisis. Swift intervention is needed to alleviate liquidity issues within local banks, promote lending to local businesses, and crack down on illicit currency trading activities”.
MATATO cited the world's two largest economies, Japan and the UK, as examples to learn lessons from the recent recession. The association said:
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That shows the extent of the financial challenges that even the big countries are facing at such points
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It is a “critical alarm” for countries like Maldives; therefore, the importance of a prudent and strong fiscal policy has increased
Due to the dollar tightness, the Cabinet has decided not to implement the decision to increase the card limit for students studying abroad from January 1. The bank has also announced that it is revising the limit on overseas transactions on cards issued to its Rufiyaa account.
