News Desk
MALÉ — A deepening shortage of US dollars in the country has ignited a sharp political confrontation between the government and opposition figures, as businesses and consumers grapple with parallel market exchange rates climbing above MVR 22 to the dollar against the official peg of MVR 15.42.
Speaking at a press briefing in Malé, former President and Maldivian Democratic Party (MDP) Chairperson Mohamed Nasheed gave the government a 10-day ultimatum to force the dollar rate down to MVR 19, demanding it be cut further to MVR 17 within a month.
“That MVR 17 is the rate that stood when this administration took office,” Nasheed told reporters, announcing that the MDP would stage street demonstrations along Majeedhee Magu. “Failing to restructure loans is another reason the price of the dollar is rising. The inability to secure a dollar bond or loan to inject dollars into the economy is also a reason.”
Nasheed also voiced strong reservations against proposed regulatory changes compelling tourism resorts to surrender 20 per cent of foreign currency earnings to local banks.
“When facing a dollar shortage, attempting to grab dollars from wherever one can get hold of them is not sound thinking,” Nasheed said. “If government policies are shaped in a way that hampers resort businesses, the potential damage to this tourism industry will be far greater.”
Responding to warnings from Minister of Homeland Security and Technology Ali Ihusan that protests would be barred along Majeedhee Magu, Nasheed insisted the demonstration would proceed, arguing that ministerial instructions overstepped police operational independence.
Government Points to Record Dollar Disbursements
Economic Development and Trade Minister Mohamed Saeed moved quickly to counter Nasheed’s remarks, releasing a video statement accusing the opposition of stoking panic to fuel the black market.
Saeed presented comparative figures showing that commercial banks are releasing far more foreign exchange at the official rate now than under the previous MDP administration:
“The volume of dollars currently being disbursed through banks to businesses, students studying abroad, for medical needs, and to individuals travelling overseas is at a level never before released by either the MMA or the Bank of Maldives,” Saeed said.
Saeed accused opposition figures of running speculative commentary that destabilises the Rufiyaa. “Especially now, individuals who have served as heads of state in this country are setting the rate—one person in the morning, another in the evening,” he said.
Saeed pointed to past MDP policies, including the privatisation of the international airport to India’s GMR and the suspension of the Fiscal Responsibility Act to monetise MVR 8 billion during the pandemic, as root causes of current economic strain. He added that President Dr Mohamed Muizzu’s government has paid down USD 1.2 billion in legacy debt while moving forward with the Velana International Airport passenger terminal expansion.
Technocrats Warn on Mega-Projects and Fiscal Priorities
As political leaders traded barbs, former senior finance officials raised structural concerns during the Dollar Sallaa panel forum broadcast jointly by Sangu TV and Adhadhu news.
Ismail Zariyand, former Chairman of the National Tender Board, warned that the state risks draining the domestic foreign exchange pool by attempting to finance multi-million-dollar capital projects locally.
“If the government runs three or four projects worth USD 1 billion or USD 200–300 million at the same time and starts sourcing dollars from the domestic market to fund them, the supply of dollars available for imports will be exhausted,” Zariyand said, noting that state project spending must match actual foreign currency inflows.
Former State Trading Organisation (STO) Managing Director Hussain Amru rejected arguments attributing domestic currency pressures to the conflict in the Middle East, pointing out that global crude oil prices sit near USD 80 a barrel compared to peaks of USD 150 during the war in Ukraine.
Amru criticised state spending choices, specifically pointing to the procurement of military drones:
“The money spent on purchasing drones was an amount large enough to import an entire month’s supply of fuel for the Maldives. Around USD 50 million was spent without any second thought. This was money meant for purchasing fuel.”
Amru called for the Governor of the Maldives Monetary Authority (MMA) to be summoned before the Majlis to account for the disparity between counter rates and open market prices, urging the government to defer capital projects like Ras Malé in favour of infill housing in Malé and Hulhumalé ahead of heavy external debt repayments due across 2025 and 2026.
Former Chief Financial Budget Executive Ahmed Sarwash Adam stated that the administration was given a complete brief on the fiscal deficit during the post-election transition period.
“The President was fully briefed on this exact reality,” Sarwash said. “The situation was explained directly to President Muizzu. Therefore, knowing the reality, the incoming administration was well positioned to take the necessary measures.”
Sarwash noted that with fuel supplies currently imported under nine-month credit terms, immediate budget pressure cannot be blamed on external shocks, but rather on domestic budget financing strategies and the pace of public financial reforms.
