The Maldives Trade Association (MTA), a prominent advocacy group for local businesses, has appealed to Maldives Ports Ltd. (MPL) to reconsider its decision to institute a US dollar-based fee structure for all shipping vessels, slated to come into force in April. The MTA posits that this decision could precipitate adverse impacts on businesses, a significant number of which are already engaged in US dollar transactions with other entities.

The statement released by the MTA underscores the challenges local businesses encounter when procuring US dollars from local banks. The organisation cautions that obligating ship agents and shipping vessels to remit payments to MPL in US dollars could trigger a surge in market commodity prices.

The MTA’s statement reads, “Amid economic adversity, particularly given the current scarcity of US dollars, this decision is ill-timed. We implore the management of MPL to retract this decision.”

MPL’s Chief Executive Officer, Mohamed Wajeeh Ibrahim, announced the decision to shift to a US dollar-based fee structure during a recent press briefing. Ibrahim explained that under the current system, ship agents levy charges on vessels transporting goods to the Maldives in US dollars and remit payments to MPL in Maldivian Rufiyaa.

These agents have been engaging in transactions involving the sale of US dollars at black market rates, fluctuating between MVR 17 and 18, and subsequently remitting payments to MPL at the official exchange rate of MVR 15.42, Ibrahim said.

“These transactions culminate in an annual total of US$ 30 million. The necessity for this transformation is imperative,” asserted Ibrahim. However, Ibrahim reassured stakeholders that this transition would not impact consumers or influence the prices of imported goods.

This decision marks a significant shift in MPL’s policy. Until 2011, MPL levied charges on ship agents in US dollars. However, a policy shift by the then-government led to a transition to Maldivian Rufiyaa.