Shipping industry stakeholders express concern over MPL's dollar payment requirement amid ongoing foreign exchange shortages

Local private shipping companies have expressed significant concern over the challenges arising from Maldives Ports Limited’s (MPL) decision to mandate US dollar payments for container handling and port services.

In April 2024, Maldives Ports Limited (MPL) reinstated the requirement for port fees to be settled in US dollars. Under this structure, a fee of $195 is levied on 20-foot containers, while 40-foot containers incur a charge of $211. However, following the amendments brought to the Foreign Exchange Act on August 26, members of the business community have expressed increasing concern over the growing difficulty in sourcing US dollars.

Business owners have reported that banks are refusing to issue US dollars except for essential purposes. This situation has created significant challenges for local businesses. The difficulties are compounded by the fact that local shipping companies, such as Maldives State Shipping (MSS) and Lily Shipping, receive payments in Maldivian Rufiyaa, while international transactions typically involve processing periods of 30 to 90 days. Despite these constraints, Maldives Ports Limited (MPL) continues to mandate immediate payment in US dollars as soon as cargo vessels dock at the port.

Maldives Ports Limited (MPL) has stated that the decision to revert port fees back to US dollars was made to address the company's financial challenges. The company noted that establishing a dollar revenue stream is essential to servicing debts incurred for its fleet and ongoing development projects.

When RaajjeMV reached out to Maldives Ports Limited (MPL) to inquire whether the company is working to address the concerns raised by shipping merchants, the media official stated that they would need to verify whether such grievances have been officially submitted to the company.

President Dr. Mohamed Muizzu’s administration is introducing several legislative amendments aimed at addressing the country’s ongoing dollar shortage. Among these changes is a mandatory requirement for resorts to convert 40 percent of their foreign currency earnings into local banks. Additionally, the government has enacted laws prohibiting the sale of dollars above the official exchange rate and criminalizing public discussion regarding such transactions.

Bank of Maldives (BML) has also implemented measures to address the ongoing dollar shortage. To balance foreign currency inflows and outflows, the bank has introduced limits on e-commerce transactions, prioritizing essential and critical payments.

However, both the general public and members of the business community continue to assert that none of these measures have provided a solution to the ongoing dollar shortage.

Industry experts note that small and medium-sized enterprises within the shipping sector are facing mounting pressure, as regulations and penalties surrounding dollar transactions are tightened, mirroring the recent measures imposed on the Maldives' tourism industry.

Furthermore, the business community is expressing concern over Maldives Ports Limited’s (MPL) decision to mandate shipping freight payments exclusively in US dollars, despite legal requirements stating that services provided within the Maldives to its citizens must be charged in Maldivian Rufiyaa.