President Dr. Mohamed Muizzu stated last night that the government will solve the issue of USD being sold on the black market through dialogue and that the results will be positive.
He made the remarks while answering a question posed to him on PSM's "Nation Chat" podcast.
When asked how long it would take for the government’s measures to eliminate the US dollar black market, President Muizzu said he did not want to give a specific timeframe.
While highlighting that the black market did not start overnight, the President said that it will take time to solve this issue.
"Instead of giving a solid timeframe, I would like to say that we will hopefully see some good progress," said the President.
The president went on to say that when he took office on 17 November 2023, the Maldivian economy was in a “deep pit”. However, he said the government continued to service the country’s debts and took measures to improve the economy.
According to the President, the current government has paid USD 1.3 billion in debt over the last two and a half years.
President Muizzu said that matters such as expatriate workers in Maldives sending money out of Maldives and holding onto foreign currency in Maldives are being done because it was shaped a certain way.
He said that because of this, it would take time to solve and that the required steps will be taken in order.
“Additionally, we are taking many steps to improve the economy. The ways in which expatriate workers take foreign currency out of the Maldives, hold foreign currency within the country and engage in various other transactions have developed in a particular way. It will take time to address these issues,” the president said on the podcast.
"Even so, we have to take the necessary steps in a specific order. This will hopefully solve the issue in the coming days. We will continue to solve the issue through dialogue with everyone's participation. This is everyone's nation. So hopefully, the results will be good."
During the press conference held at the President's Office, Minister of Homeland Security, Labour and Technology Ali Ihusaan stated that upon looking into seven unlicensed foreign currency exchange companies, it was revealed they had exchanged USD 77 million on the black market over nine months.
According to Minister Ihusaan, their investigations showed that unauthorized foreign currency exchange vendors do not bring USD into Maldives nor do they provide a service where revenue can be generated in USD. He said that they have looked into the parties that provide USD to the vendors.
Minister Ihusaan went on to say that the amount exchanged on the black market from some resorts is 20 percent higher than the amount set by the Maldives Monetary Authority's (MMA) foreign currency exchange regulation for banks.
As part of the government's steps in solving the issue, the Parliament passed the amendment to the Foreign Currency Act yesterday where 40 percent of the revenue generated in foreign currency by resorts and guesthouses is to be exchanged at banks every month.
As per the bill, the stated businesses will have to exchange 40 percent of their total revenue at banks from 1st September onwards.
While the bill has been passed in Parliament, the Maldives Association of Tourism Industry (MATI) stated on 24th August that exchanging 40 percent of their USD revenue is not sustainable as resorts rely quite heavily on USD to provide services and other matters.
In a statement written by MATI, they said that exchanging 40 percent of their USD revenue is not a viable amount for the industry as resorts use USD to pay salaries, service charges, taxes (Tourism Goods and Services Tax (TGST), Green Tax, Withholding Tax and Income Tax), rent and loans that need to be paid in foreign currency.
