Dollar crisis can be solved through strict action: Expert

Sunday, July 15th, 2012

Concern is growing among the public about the continuing foreign currency shortage in the country. These people feel the country is earning considerable amount of foreign currency, but the public are facing increasing difficulties to buy foreign currency even for emergency needs such as medical care, let alone the spiraling cost of foreign currency. Hussain Ismail who spoke to Miadhu daily on the matter referred to the pathetic situation to go through to buy foreign currency after staying in a queue from midnight. Even after spending so much of time in  queue, only few persons can buy a maximum amount of US $ 200 each, he said. He went on saying that  it is puzzling why the people of the country who are the owners of these assets  cannot buy some foreign currency from the country’s foreign currency earnings and why can’t any Government take serious action to solve this crisis.

Hussain mentioned emotionally you have to buy US dollars for as much as Rf17 and 18 and he sounded very worried when he referred  some speculations that Maldives Rufiyaa is again going to be devalued. What are we going to do? He asked.

We asked for opinion of Mohamed Giyas, an economic expert who had worked in the MMA earlier on the foreign currency shortage. Giyas said some general mathematics and data indicate that the country will earn at least US $ 1.6 billion a year from tourism. Even after essential expenditure of the state including oil, repayment of debts, there should be at least US $ 700 million for the reserve, he said.

“ What is happening is accounts are often changed and much smaller earnings are reflected in income figures . Major part of the earnings are deposited in banks abroad. The fact is that even in other countries stringent measures are taken to control foreign exchange even under normal circumstances. So in crisis situations like ours such measures are essential. The bigger objective is the good of the country, the people.  In some countries all foreign currency coming to the country has to be changed to the currency of that country. Even to buy a ticket for a ferry, taxi or even to buy a souvenir, any thing, you have to pay in the local currency. Foreign currency has to be changed to local currency from authorized money changers before doing any transaction.”

Moreover,  the income from tourism and such investments are generated from the valuable assets and resources of the country. So it is a right of the country to demand at least a part of the foreign currency earnings, example 30% of it to be exchanged to Rufiyaa and deposited in our banks, through law or regulation. The Government must not hesitate to take such action. It is not discouraging free market policy or investment, it is a right, a responsibility to help relieve our problems and help improve the life of the people. We have to be steady and courageous to do what is necessary without fear or favour” Giyas said.

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