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Black market USD rate drops below MVR 19

Mariyam Malsa
14 September 2020, MVT 18:24
A man withdraws US dollars from a Bank of Maldives Dollar ATM. PHOTO: NISHAN ALI / MIHAARU
Mariyam Malsa
14 September 2020, MVT 18:24

The US dollar black market rate in Maldives dropped from approximately MVR 20 to MVR 18.80 per dollar.

According to local media outlet Mihaaru, dollar trading points located in the capital city of Male' charged MVR 19.80 until Saturday.

Several anonymous US dollar dealers have attributed the recent drop in rates to a reduction in demand for dollars in Maldives.

While dollar exchanges for rates above the standard rate of MVR 15.42 per dollar as specified by Maldives Monetary Authority (MMA) are illegal, traders and other buyers often opt to buy US dollars from the black market due to lack of sufficient dollar availability at banks.

Black market rates for dollars initially fell amid the COVID-19 pandemic due to the halt in tourism and subsequent disruption of foreign currency inflow.

Following nearly four months, the Maldivian government reopened borders to international passengers on July 15.

The Maldivian economy is heavily reliant on tourism, which contributes over two-thirds of the GDP, 80 percent of exports, and 40 percent of revenue. The industry began to decline in February over the coronavirus pandemic, coming to a deadlock on March 27 as Maldives, like many other countries, closed its air and sea borders to tourist arrivals.

In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the pandemic.

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