Reporting on black market USD rate to be met with fines of up to MVR 500K

The Parliament’s Public Accounts Committee has revised the foreign currency exchange bill to prohibit publicly advertising or even reporting on the black market rate for US dollars, and introduce fines of up to MVR 500,000 for violations.

The government bill to amend the Foreign Currency Act, sponsored by Holhudhoo MP Abdul Sattar Mohamed, seeks to drop the current option for resorts to exchange USD 500 per tourist, and require that the facilities to exchange 20 percent of the monthly revenue.

The bill was sent back to the committee for further review on Tuesday.

During a committee meeting on Wednesday, Funadhoo MP Mohamed Mamdhooh, a lawmaker from the ruling People’s National Congress (PNC), submitted two significant amendments to the bill.

One amendment is the introduction of provisions prohibiting advertising forex rates above the official rates or bands.

This includes publishing, disseminating, or sharing any such information via any public digital medium or platform for the purpose of advertisement, promotion or information dissemination.  

The amendment prescribes fines of MVR 25,000 – MVR 500,000 for violations.

Wednesday’s committee meeting – held with the mics switched off for a large part – also saw Mamdhooh submit a second amendment to introduce provisions

Mamdhooh also submitted a second amendment during the committee meeting – during which the mics were switched off for long periods – to introduce fines of MVR 25,000 – MVR 1 million for engaging in foreign exchange transactions above the official exchange rates or bands.

The amendments sparked concern from members of the main opposition Maldivian Democratic Party (MDP) who sit in the committee.

Hanimaadhoo MP Abdul Ghafoor Moosa (Gapo) said that foreign currency exchanges must not be fined amounts higher than the value of their transactions.

He argued that the fines must be prescribed based on the severity of the violation.

Meanwhile, South Hulhumale’ Dr. Ahmed Shamheed described the blanket ban on advertising or reporting on black market rates as another “gag order.”

“They should be allowed to report on things happening in the country. I believe its wrong if they [journalists] can’t write reports stating that they are selling dollars for MVR 23 in this market or that the country has run out of dollars,” he said.

Shamheed said that while he supports many of the other provisions in the bill, he does not believe it offers a solution to the dollar crunch.

“This will just create a black, black market. There’s high risk to smuggling in dollars. And there’s high risk of the dollar rate further increasing as a result,” he said.

Shamheed said that people should be allowed to say the dollar rate is high, if its high.

The amendments passed with the backing of the PNC members, who hold a supermajority in the committee as well as the rest of the Parliament, despite protest from opposition lawmakers.