Connect with us

Business & Tourism

MDP questions sudden surge in foreign reserves

The main opposition Maldivian Democratic Party has called for an inquiry into the sudden hike in Maldives’ foreign reserves. The source of some US$400million is unknown, the party said in a report issued on Monday.

Published

on

The main opposition Maldivian Democratic Party has called for an inquiry into the sudden hike in Maldives’ foreign reserves.

The source of some US$400million is unknown, the party said in a report issued on Monday. The MDP had previously accused the central bank Maldives Monetary Authority of helping to launder some US$1.5billion last year.

Foreign currency reserves abruptly rose to US$700million in 2015, according to publicly available statistics by MMA, the party said. But usable reserves stood at US$200million.

The MDP said it was raising questions over the reserve because “there is no basis to explain the increment,” given the revenue collected by the tax authority, and a slowdown in economic growth and foreign direct investment last year. The central bank had also slashed minimum reserve requirement for commercial banks last year, the report noted.

“These figures do not add up… some US$400million is unaccounted for,” the party said.

Economic growth stood at 4.8percent instead of the predicted ten percent last year.

Screen Shot 2016-03-01 at 14.33.28

MDP officials have alleged that US$1.5 billion in cash was brought to the Maldives last year on a chartered flight, stored at the state treasury, and transferred to private bank accounts through the MMA.

The central bank, which denied allegations of money laundering as “complete falsehoods,” declined to comment immediately on the new accusations, but pledged to explain the hike in foreign reserves on Wednesday.

The MDP has also accused Governor Azeema Adam of being subject to executive influence, and noted that the post of the head of Financial Intelligence Unit at the MMA has been vacant since Athif Shakoor resigned in December.

The report also criticised Azeema for inaction when some US$80million was stolen from state coffers over the past two years. A damning audit has revealed bank fraud by the heads of state-owned enterprises in depositing checks made out to the state in accounts linked to private companies.

In light of the historic corruption scandal, the MMA said it has requested “technical assistance from the International Monetary Fund in assessing the Maldivian banking system to identify areas of concern and weaknesses.”

Former President Mohamed Nasheed has meanwhile alleged that correspondent banks are pulling out of the Maldives because of money laundering suspicions.

President Abdulla Yameen, however, blamed US-based JP Morgan Chase’s dropping the Maldives from its client list on Nasheed’s claims of Maldivian militants in Syria.

Popular