Black market dollar value plummets again

The dollar exchange rate in the Maldivian black market has dropped again, owing to an influx of the currency's availability in the market.

Those involved in the dollar exchange business say that the rates are now between MVR 17.30 and 17.65, which is 20 to 30 Laari lower than at the beginning of the year.

Exchange rates at the time ranged from MVR 17.70 to MVR 18.0. However, the standards official exchange rate for dollars is MVR 15.42.

While the black market value of dollars has lowered, parties exchanging dollars in large sums are able to get deals at even lower prices, going as low as MVR 17.10 to MVR 17.20.

"Dollar rates dropped significantly during the previous [parliamentary] elections. Since then, they have increased slightly but remain lower than at the beginning of the year," an individual who's in the dollar exchange business said.

While the value of dollars has decreased, tourism, one of the biggest industries contributing to the inflow of dollars into the country, is on the rise. It has been reported that Maldives records an average of 6,400 tourist arrivals per day. This is a 12 percent increase when compared to 2023.

However, local banks still impose foreign transaction limits on local debit cards connected to Maldivian Rufiyaa accounts - a policy implemented during the Covid-19 pandemic when the country's tourism industry briefly shut down, and dollar inflow was severely limited.

At the time, black market rates soared and went as high as MVR 20. However, it stabilised around MVR 17.30 and MVR 18.15 later on.

Speaking to 'Mihaaru News' in a recent interview, Finance Minister Dr Mohamed Shafeeq said that significant measures would be taken to resolve the dollar issue and its dependency in the country.

The government is working closely with the country's central bank Maldives Monetary Authority (MMA) to find a solution, he said.