The government has stepped up efforts to address pressure on foreign currency reserves, linking the country’s persistent dollar shortage to widespread illegal business operations run by foreign nationals.
Authorities say the issue has continued despite earlier measures, prompting targeted investigations into enterprises suspected of operating as fronts for foreigners who remit large sums of money overseas each year. Officials argue that this steady outflow of dollars has placed significant strain on the economy, contributing to the growth of a parallel market for foreign currency. Despite the government’s interventions, the black market exchange rate for the US dollar has remained consistently above MVR 19 for several weeks.
Speaking to state media, Minister of Homeland Security and Technology Ali Ihusaan said a central concern involves businesses registered under the names of Maldivian citizens but effectively owned and managed by foreigners. He explained that many such businesses are able to operate by exploiting lower labour costs, while Maldivians whose names appear on official documents receive a fixed monthly payment in return.
According to the Minister, these arrangements often reduce Maldivian involvement to that of nominal owners, with little or no role in daily operations. He said this has enabled significant profits to be transferred abroad each year, further tightening the supply of foreign currency in the domestic market and worsening the dollar shortage.
Minister Ihusaan confirmed that enforcement agencies have begun special operations to monitor suspected businesses, their foreign associates, and related financial transactions. The focus is on identifying offences linked to illegal immigration and money laundering.
The government has warned that strict action will be taken against those found to be involved, including criminal prosecution. The public has also been urged to end any participation in such arrangements and to report known cases to the authorities, with officials stressing that broader cooperation is necessary to address a dollar shortage that continues to affect the wider economy.
