In this week’s radio address, President Mohamed Nasheed, underlined the benefits of the government’s decision to introduce a managed float of the Rufiyaa, allowing the currency to fluctuate within a 20 percent band of its previous dollar peg.
He asserted that, since the government decided to float the currency on April 11, incomes and living standards of 65 percent of Maldivian workers has improved significantly.
The decision to introduce the managed float of the currency is part of a package of measures the government has introduced, on the advice of the central bank, IMF and other multi lateral organizations, in order to reduce the country’s budget deficit and stabilize the economy.
The President said floating the currency, effectively devaluing Rufiyaa, has increased the income of fishermen and resort workers who add up to more than 65 percent of the country’s working population.
He said until the government allowed the market forces to determine the exchange rate Rufiyaa against UD Dollar, value of Rufiyaa was set artificially and hence the market prices did not reflect the real value of goods and services.
However, the President noted that floating the exchange rate has allowed the market forces to set the prices of goods and services on the back of the strength of the economic fundamentals.
He further said the artificially set exchange rate was a “great injustice” to that 65 percent of the workforce as the real value of their wage was artificially deflated.
The President said, implementing a managed float of Rufiyaa was the proper way to determine the real exchange as well as reduce the exchange of Rufiyaa against dollar.
In his radio address today, President Nasheed also addressed the concerns of many people, especially in Male’, over the increase of prices in the market after the government decided to float the currency.
He said allowing the market forces to set the exchange rate was necessary to achieve the long term sustainability of the economy, and eventually the exchange rate, and therefore, the prices would settle lower than it was before.
He added that, the government has begun to see the positive impact of its decision over the first few weeks after floating the currency.
He noted that the only impact of floating the currency was not the rising prices in the market, saying the State Trading Organisation has maintained the prices of essential goods lower, and private businesses also brought
The President noted that the amount of US Dollar sold to banks have increased from US$4 million, before floating the Rufiyaa, to US$16 million in the first week and to over US$20 million in the next few weeks.
The President underscored that economic reform measures including floating the currency was necessary for the long term economic stability of the country.
He said the changers were being implemented within the democratic framework of this country where freedoms of expression, assembly and peaceful political activity were allowed and in fact welcome.
Speaking in this regard, he said while the voice and opinion of the opposition should always be heard, there would be no excuse to organise any criminal activity such as setting properties on fire and destroying private property during protests.
Reiterating that the government would always uphold people´s right to peaceful political activity and protest, he said he had all the confidence in the opposition to prioritize national interest.
In today´s radio address, the President also extended greetings to members of the Maldivian defence forces and Huraa dynasty on the occasion this year´s Huravee Day.
Huravee Day pays tribute to Sultan Hassan Izzudin, who freed the Maldives from South Indian invaders on 3 Jumadhul Akhir 1166 in Islami calender.