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No shortage of dollars, rates will be constant: President Solih

Nafaahath Ibrahim
26 March 2020, MVT 16:38
President Ibrahim Mohamed Solih speaking to the press. PHOTO: AHMED ASHWAN ILYAS / MIHAARU
Nafaahath Ibrahim
26 March 2020, MVT 16:38

President Ibrahim Mohamed Solih on Wednesday assured that despite the decline in tourist arrivals over the global COVID-19 pandemic, there would be no shortage of dollars, stating that rates can be maintained in the country.

Speaking to the press at the National Emergency Operation Center (NEOC), President said that after the rates raised initially, the issue was discussed with the Central Bank and the governor fo Maldives Monetary Authority (MMA) Alli Hashim. After these discussions, MMA came to a decision to issue more dollars to the banks in Maldives.

In his remarks, the President also confirmed that MMA is up to date on the daily dollar requirements of the Maldivian market.

Stating that since the amount of goods being imported from Maldives has decreased and as the prices of food have lowered globally, the president claimed the Maldivian market's dollar need would be less than previous.

"Hence, even if we release the same amount of dollars into the market, there should not be an increase in rates."

President Solih assured that, as of yet, the situation did not justify an increase in the prices of goods as the government is working to maintain the dollar rates.

Once more referring to there not being a shortage in USD, the president said that the country was provided up to USD 400 million dollars for use under the Currency Swap Agreement signed with India. Further, he noted that the potential for foreign currency arrangements with various financial institutions across the globe, as being highly probable.

Since the beginning of the COVID-19 outbreak, the number of tourists to Maldives has decreased drastically. President Solih formerly forecasted that the country may face losing an amount between USD 135.9 million and USD 446.6 million as state earning over the current health crisis.

Maldives economy is heavily reliant on its tourism sector. As over 70 percent of the country’s GDP is attributed to revenue generated by the tourism industry, Maldives’ economy continues to face severe repercussions due to travel restrictions imposed over the COVID-19 outbreak. Currently, tourists are temporarily banned from checking-in to guesthouses and city hotels across the country, while over 50 resorts have halted their operations. On Wednesday, the government announced plans to stop issuing on-arrival visa from Friday onwards, which will bring the tourism industry to a halt. As a result, it is estimated that the country will face a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency.

Experts estimate that the global economy may continue to take even more hits as COVID-19 continues to spread at an alarming rate around the globe.

The World Health Organization classified the spread of COVID-19 as a global pandemic on 11 March. Presently, the novel coronavirus has infected more than 440,326 and claimed over 19,752 lives around the world. However, out of those infected, more than 112,028 have recovered.

Maldives now has 13 confirmed and five active cases of COVID-19, with total eight recoveries. So far, only tourists and resort employees have confirmed infections in Maldives with no record of local transmissions within the country. The first Maldivian tested positive for the virus in the United Arab Emirates (UAE).