Economic expert Ahmed Mohamed has warned that the fundamental issues within the foreign exchange market cannot be resolved through enforcement measures alone.
Responding to remarks made during a government press conference yesterday, Ahmed Mohamed—who previously served as Minister of Economic Development and Chairman of STO—noted in a post on X that the briefing indicated relevant authorities are preparing to launch a coordinated effort to regulate the foreign exchange market and strengthen law enforcement.
He emphasized that while regulations can alter how and where foreign currency transactions occur, administrative actions alone cannot address the underlying economic factors causing the foreign currency shortage and the disparity between the official exchange rate and the actual market rate.
"From an economic perspective, an important distinction must be made. While regulations and enforcement measures can change the methods and venues of foreign exchange transactions, these actions alone will not resolve the economic reasons behind the currency scarcity and the wide gap between the official and market rates," Ahmed Mohamed said.
He questioned whether the government's objective is to effectively implement the existing foreign exchange framework or to attempt to solve fundamental systemic issues through administrative interventions.
As Ahmed highlighted these concerns, several parties have also called on the government to eliminate wasteful spending as a means to resolve the ongoing dollar crisis.
Efforts are currently underway to submit legislative amendments to Parliament that would increase the mandatory conversion of tourism sector earnings from 20 percent to 40 percent, while shifting the conversion frequency from every three months to a monthly basis. Additionally, Governor Ahmed Munawwar announced that resort expenditures in dollars will be monitored more closely to prevent foreign currency from leaking into the black market.
Minister of Homeland Security and Technology Ali Ihusaan warned yesterday that some licensed money changers are selling dollars at inflated rates, noting that they could face fines of up to one million Rufiyaa for each such transaction. He further characterized the sale of dollars on the black market as a form of money laundering.
Furthermore, the Governor revealed that work is underway to establish a system to monitor and prevent the use of fraudulent Telegraphic Transfers (TTs).
