The government has laid out a series of urgent economic measures following a cabinet meeting on Sunday, aimed at addressing the country’s mounting fiscal challenges and ongoing issues with foreign currency shortages. Key members of the government, including Foreign Minister Moosa Zameer, Finance Minister Dr Mohamed Shafeeq, Minister of Economic Development and Trade Mohamed Saeed, and Attorney General Uz Ahmed Usham, provided details during a press conference held at the President’s Office.
Foreign Minister Moosa Zameer announced that both China and India had given a “green signal” to potentially defer upcoming loan repayments, although official agreements have not yet been finalised. Minister Zameer highlighted the positive progress of diplomatic efforts, noting that discussions to reschedule loans related to non-functional assets are ongoing.
Finance Minister Dr Mohamed Shafeeq addressed recent public outrage over the Bank of Maldives’ abrupt decision to limit foreign transactions on cash cards linked to Maldivian Rufiya accounts. The decision, which was met with widespread backlash, particularly from Maldivian students abroad and residents seeking medical treatment overseas, was quickly reversed by the bank. Dr Shafeeq reassured the public that the government would ensure better communication and planning to prevent such issues in the future.
In response to the foreign currency shortage, the cabinet has approved critical measures aimed at stabilising the economy. These include mandating that companies earning revenue in US dollars pay their taxes, pension contributions, and Customs duties in dollars. Attorney General Uz Ahmed Usham elaborated on the legal amendments required to support these measures, including modifications to the Pension Act, revisions to the Income Tax Act, and changes within the Maldives Inland Revenue Authority (MIRA). The Attorney General indicated that further updates on these amendments would be provided within one to two weeks.
Minister of Economic Development and Trade Mohamed Saeed discussed the broader economic implications, acknowledging that the Maldives Monetary Authority (MMA) is actively working to address the Bank of Maldives’ foreign exchange needs. He noted that this time of year typically sees a dip in foreign exchange flows but expressed confidence that the ongoing economic challenges would be resolved by year’s end, with an anticipated increase in the country’s production output.
Earlier this year, the Minister announced that progress had been made in stabilising the nation’s dollar exchange rate. However, this has not been the reality for most of the year, as the country continues to face significant challenges in maintaining a stable currency flow. The ongoing shortage of foreign currency has exacerbated these difficulties, prompting the government to take more drastic measures.
As the Maldives moves forward, the effectiveness of these measures will be closely watched by both domestic stakeholders and the international community.
