Maldives is currently going through a serious economic crisis. The country’s monetary authority had warned a few days ago that the official dollar reserve of the Muizzu government has gone into minus for the first time in the country’s history. That is, there is no money left even for spending. Raising questions on the economic policies of the Muizzu government, former finance minister Ibrahim Ameer says that credit rating agencies like Fitch and Moody’s may soon downgrade Maldives’ credit ranking. He alleged that the Maldives government is unable to understand diplomatic reactions.
Former Maldives Finance Minister Ibrahim Ameer on Sunday said that the economic crisis in Maldives is deepening and the root cause of the country’s current financial crisis is dependence on requisitioned revenues. The former finance minister also alleged that the Muizzu government is dependent on negotiations with other countries to raise money. He said that the Maldives government has now realized that things are not going well. Ameer further said, “The country’s fiscal policy and financial affairs cannot be shaped like this.”
It is worth noting that the Maldives Monetary Authority (MMA) had sent a warning letter to the country’s Finance Ministry earlier this week that the country’s usable dollar reserve would be exhausted in a few days. This is the first time in the country’s history that the dollar reserve has gone into minus. According to local media reports, the Muizzu government had an oil bill of $25 million outstanding till August 21 and after paying the bill, the reserve money has gone into minus.
Days later, the Bank of Maldives (BML) on Sunday blocked dollar transactions with rufiyaa cards and reduced the limit on previously issued credit cards to $100. The country’s national bank said the changes were effective immediately and were made in response to the increased use of foreign currency spending on cards and steady sales of foreign currency to the bank.