MMA Increases Weekly Dollar Release to Banks by 51%

The Maldives Monetary Authority (MMA) has increased the weekly amount of US dollars released to commercial banks by 51 percent to improve foreign currency availability and ease pressure on the foreign exchange market.

The central bank said the increase will apply for the next three weeks, starting this week, and aims to improve access to foreign currency through the banking system while helping businesses secure dollars needed to import goods.

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The MMA said it has taken several measures since February to ease pressure on the foreign exchange market following a decline in dollar inflows into the Maldives. The central bank attributed the reduced availability partly to a slowdown in tourism linked to ongoing conflicts in the Middle East.

The latest increase follows previous measures to boost dollar availability. Ahead of Ramadan this year, the MMA increased weekly dollar releases to banks by 32 per cent to support imports of essential food items and help maintain price stability.

The authority also increased weekly dollar releases by 26 per cent in June to provide additional support to businesses during the tourism off-season.

Comes Amid Growing Criticism Over Dollar Shortage

The move comes amid growing criticism of the government over the shortage of US dollars and the widening gap between the official and unofficial exchange rates.

Economic Development, Transport and Trade Minister Mohamed Saeed acknowledged the existence of a dollar black market in the Maldives during a state media programme yesterday. He said he had heard reports of the dollar trading at MVR 21, MVR 22 and MVR 23 on the unofficial market, while also criticising media reports on black-market rates.

Meanwhile, the opposition Maldivian Democratic Party (MDP) has called for MMA Governor Ahmed Munawar to be summoned before Parliament’s Public Accounts Committee to answer questions about the deteriorating foreign exchange situation.

Hussain Amr, chair of the MDP’s Microeconomic Committee, made the request in a letter to Parliament Speaker Abdulraheem Abdulla dated August 9, describing the situation as being in “dire straits” and calling for immediate action.