Ahmed Munawar, nominated as the next Governor of the Maldives Monetary Authority (MMA) by President Dr. Mohamed Muizzu, emphasized the urgent need for austerity measures during his address to the Parliament’s Public Accounts Committee on Monday.
Munawar, set to succeed Ali Hashim following Hashim’s dismissal, outlined his strategy to address the nation’s economic challenges. He highlighted the compact nature of the banking sector as a significant barrier to retaining foreign currency within the Maldivian economy. Expanding the banking sector, Munawar stated, will be a top priority to enable local banks to support resort development projects.
Munawar identified declining tourism receipts and an MVR 8 billion overdraft from public accounts as major concerns. He also noted that MVR 6 billion of printed money remains with commercial banks, worsening currency exchange issues. The disparity between circulating Maldivian Rufiyaa and available US dollars has driven up black market exchange rates.
To address these issues, Munawar proposed reducing state expenditure to align with earnings. He stressed the need to redirect the majority of dollar revenue to repay external loans and expand the currency reserve to combat black market exchange rates.
Munawar praised state-owned enterprises for diversifying their activities and called for ways to retain tourism-related foreign currency revenue within local banks. He emphasized the Maldives Monetary Authority’s crucial role in this effort and the necessity of legal reforms to better monitor dollar circulation.
Recent trends show most foreign currency earnings are used to service external debts, with the black market exchanging US dollars at over MVR 18 per dollar. The World Bank has urged the Maldives to address its debt-related issues promptly.
After Munawar’s interview, Parliament Deputy Speaker Ahmed Nazim announced that Munawar received an average score of 70 marks, and his nomination was unanimously approved by the Public Accounts Committee.
Munawar’s proposed strategies of austerity measures and banking sector expansion will be closely watched as potential solutions to the Maldives’ ongoing economic challenges.
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