Finance Minister Claims Lack of Counsel from MMA

Finance Minister Dr Mohamed Shafeeq has asserted that the government has not received guidance from the Maldives central bank, the Maldives Monetary Authority (MMA), on improving the country’s financial and economic conditions.

This statement was made in response to a letter from the Parliament Secretariat seeking clarification on the matter. Addressing Parliament Speaker Abdul Raheem Abdulla, Dr Shafeeq noted that since the current administration took office, MMA has not proactively offered counsel to the Ministry of Finance.

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However, he acknowledged that discussions were held with MMA at the end of last year to undertake policy-level work. During these discussions, the Ministry requested that MMA better regulate the foreign currency exchange business. Since then, MMA has also held technical-level meetings focused on strengthening the foreign exchange market.

In his letter, Dr Shafeeq stated that MMA had not worked to align fiscal and monetary policy optimally. He highlighted that the decision to raise the minimum reserve requirement (MRR) maintained by MMA has posed challenges to financial transactions with commercial banks. Nevertheless, he mentioned that solutions have been found in subsequent meetings with MMA.

The Finance Minister’s letter to parliament followed the Public Accounts Committee’s request for clarification. This request came after the committee decided to call for the removal of MMA Governor Ali Hashim, citing the authority’s failure to fulfil its responsibilities amid a weakened economy.

In response, Governor Ali Hashim submitted a report to parliament stating that MMA had provided the necessary information, counsel, and assistance to prevent an economic crisis. The report indicated that MMA continues to work on addressing the country’s economic challenges. 

Governor Hashim emphasised that the primary cause of the current economic situation and the fear of an economic crisis is the lack of attention to the counsel provided by MMA and international financial institutions over the past two years. He noted that the state had not maintained the fiscal discipline advocated by MMA.

Governor Hashim assured that he and MMA would fully cooperate during this challenging period, stressing the importance of collective efforts by the entire state to overcome the economic difficulties.