The dollar shortage situation has worsened following government warnings that black market currency trading constitutes money laundering and will be met with legal action.
In the wake of the warning, many authorised money exchange outlets remained closed yesterday, raising concerns over the unavailability of US dollars.
Speaking to Adhadhu, one businessman noted that the black market rate for the dollar has surged past MVR 23. He stated that he had approached the Bank of Maldives (BML) to inquire whether dollars could be obtained at the official rate to settle import payments.
"I contacted BML because I wanted to avoid buying dollars from the black market for a Telegraphic Transfer (TT). However, they informed me that they can only support 20 percent of the invoice value. This means for a USD 10,000 invoice, I only get USD 2,000 at the official rate. Where am I supposed to find the remaining USD 8,000?" he asked.
Several other traders have raised similar complaints regarding the acute shortage of foreign currency.
Addressing the ongoing crisis during a press conference at the President’s Office earlier this week, Homeland Security Minister Ali Ihusaan warned that licensed money changers found selling dollars at inflated rates could face fines of up to MVR 1 million for every transaction.
Ihusaan alleged that the market is being deliberately manipulated. He claimed that the rise in dollar rates is driven by a coordinated network involving money exchange businesses and opposition political figures.
"We have observed activities outside of normal market behavior, involving manipulation and specifically the involvement of political entities," Ihusaan said.
The Minister further claimed that exchange rates are being set through daily informal discussions among money changers.
"When the sun rises in the morning, the major money changers call each other to decide today's rate. This is not how it works elsewhere in the world, but this is the current behavior here," he said.
During the briefing, Ihusaan also categorized unlicensed dollar trading by both businesses and individuals as money laundering.
"Under Maldivian law, engaging in an activity that requires a permit without obtaining one is a criminal offense. This means unlicensed money exchange is a crime. Using, trading, or profiting from funds acquired through such criminal acts constitutes money laundering under current laws," the Minister explained.
Ihusaan highlighted individuals who receive their income in US dollars.
"Unlicensed currency exchange is a criminal offence. This includes individuals. For example, if I receive my salary in dollars and sell it on the black market, that is unlicensed money changing by definition," he said.
Despite these measures, economic experts have cautioned that such a crackdown will not resolve the underlying issues causing the dollar shortage.
