Minister of Finance Dr. Mohamed Shafeeq has revealed the current dollar shortage is largely due to the unlimited currency printing by the previous government following the COVID-19 pandemic. The finance minister made this statement during a press conference where he provided an update on the government's ongoing efforts to improve the economy.
During the press conference, Dr. Shafeeq emphasised that when President Dr. Mohamed Muizzu assumed office last November, the economy was in a fragile state. He pointed to the unregulated currency printing as a significant factor contributing to the current economic challenges. The previous government printed large amounts of money in 2020 and 2021 to address the economic fallout from the pandemic, and continued to print currency in 2022 and 2023, even as the economy began to recover.
Dr. Shafeeq highlighted that this excessive money printing has led to an increased demand for dollars, exacerbating the current shortage. He added that the government is now exploring ways to generate more dollars from dollar-earning sectors and to boost dollar reserves, including potential changes to laws or regulations.
Additionally, the finance minister announced plans to amend the GST Act next year as part of efforts to recapture revenue that is currently leaving the tourism sector.