The police have met with the senior officials of local and international banks based in Male’ to track persons who are found to buying dollars continuously, in a crackdown on the trading of dollars in the Maldives.
There are people who take advantage of dollars provided by the banks for persons who require travel abroad for medical purposes, said police.
“Police asked the banks to identify those who take advantage of the dollars that are supposed to be provided to people who need the money for medical purposes, and to share this information with us,” police said.
Police said they also discussed with banks about how to resolve the issue and what measures would be more effective.
“Police discussed the upgrading on banks’ policies to monitor staff suspected of trading dollars illegally,’’ said Superintendent of Police Mohamed Jinah.
Police would identify those buying dollars and collect information the information according to monetary laws, Jinah said.
He also said that Maldives Monetary Authority (MMA) was cooperating with police in its special operation to control the black market for dollars.
The special operation began this week after President Mohamed Nasheed during a Maldivian Democratic Party (MDP) rally said that he would “put a police officer behind evey dollar” in the country if necessary.
Nasheed said that there were adequate amount of dollars in the country and that there should be no reason the country was suffering a dollar shortage.
After the police operation started, police have been checking suspicious people and places where illegal dollar transactions are likely to happen.
The set dollar rate in the Maldives is Rf12.75, however during the dollar shortage it has increased to 13, 14, 15 and sometimes even as high as 16 on the black market. However banks routinely refuse to change rufiya into dollars, and experts have claimed that the crackdown will do little to address the demand for foreign currency or the budget deficit, which has led to the pegged rate not reflecting the value of the rufiya.
In 2009 June, to ease the dollar shortage, the cabinet decided to give letters of credit facility to importers of basic food items and other necessary commodities to the Maldives.
The President’s Office then formed a committee consisting of senior officials of the Ministry of Finance and Treasury and the Ministry of Economic Development, to review applications for receiving letters of credit, and give the letters of credit in a priority order.
”The government believes that this measure will ease the problem of the dollar shortage,” the President’s Office said at the time. ”The increased number of expatriate workers in the Maldives has contributed to the problem of dollar shortage in the Maldives. It is estimated that every month more than US$2 million is sent out from the Maldives by the expatriate workers. The cabinet members noted that reducing the number of expatriate workers was also an important measure to be taken.”
In December 2009, Spokesman of MMA Ibrahim NaseerNaseer told the local media that the deficit in foreign exchange is a result of MMA printing a large amount of Maldivian rufiyaa to make up to government spending which was more than the government income.
In August 2009, MMA Governor Fazeel Najeeb told the press that the cause of the dollar shortage was that rufiya notes had been printed in large amounts, exceeding the amounts of dollars in the country and dollars coming in to the country, and had been injected into circulation.