Fazeel Najeeb, Governor of the central bank Maldives Monetary Authority (MMA) has said that out of every 1 Rufiyaa that the country recieves, 75 Laari has to be converted to US Dollars due to the high amounts of imports to the Maldives.

The Governor said yesterday that Maldives is amongst the counties that see the highest amounts of imports around the world and that the high import intensity largely contributes to the dwindling of the State reserve.

“We import almost everything. Considering our import intensity, we have to exchange 75 Laari to Dollars from every Rufiyaa out of the national income GDP, just for imports. Those are just the import of goods. We also import a lot of services, to study, for health purposes, and for holidays abroad. So everything included, the import intensity is very high,” Governor Fazeel Najeeb said.

He said that the Authority has now assembled a regulation to resolve the shortage of foreign exchange. He said that the aim is to reduce the amount of local currency that chases the US Dollar, and that MMA is currently working towards this end.

He also said that the increased borrowing needs of the government has reduced the ability of the banks to fund the private sector by 9 percent, and warned that the high amounts of borrowing from the government will cause interest rates to increase.

The Governor also said that while the State reserves should hold at least 6 month’s worth of reserves, the state reserves now hold only $344 million, a total of two months of reserves. Reflecting on upcoming state payments, Fazeel Najeeb said that the gross reserve will decrease to $310 million by the end June and that the net reserve will hold a total of $118 million.