Finance Minister Hassan Zareer announced today that the government has begun releasing outstanding payments to small private businesses in installments.
Speaking at the People's Majlis, Zareer said that the process of settling dues for companies owed less than MVR 500,000 has commenced. However, he noted that these payments are being disbursed in stages.
"We are now regularly processing payments for those owed less than five hundred thousand. As I have mentioned before, we are not leaving anyone out; we are paying a portion of the outstanding dues as our cash flow permits," he said.
The government's failure to settle its debts has caused financial distress for businesses, with some facing bankruptcy. President Mohamed Muizzu had previously pledged to release these funds ahead of the parliamentary and local council elections.
Muizzu has provided six different dates for the disbursement of these funds. However, each time a deadline passed, a new date was set.
In addition to the payments owed to businesses, Zareer also addressed the ongoing dollar shortage in Parliament today. He attributed the current scarcity to the repayment of a USD 500 million loan in April.
"One of the biggest reasons we are experiencing such a severe dollar shortage is the lump-sum repayment of a USD 500 million Sukuk. We are currently working on the necessary measures to resolve these difficulties," he stated,
Financial experts suggest that a major factor behind the rising value of the dollar is the repayment of the USD 500 million loan using existing foreign currency in the economy without securing new investments or loans. Experts further noted that the failure to reduce dollar expenditure is also a key driver of the currency's appreciation.
