The US dollar black market rate in Maldives dropped to MVR 16 per dollar following the spike amid the COVID-19 pandemic.
Despite the fall in rates, licensed traders continue to maintain the exchange rate at MVR 18 per dollar.
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. They subsequently increased and remained between MVR 18 and MVR 19 per dollar for a considerable period.
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.
Following nearly four months, the Maldivian government reopened borders to international passengers on July 15.
The pandemic-ridden 2020 wrapped up with the country noting only 555,000 incoming tourists, a stark difference compared to the 1.7 million travellers that holidayed across the archipelago in 2019.
On average, Maldives recorded 3,000 arrivals per day after the country opened up for travel, peaking at 4,200 per day during December.
According to the tourism ministry, the goal for 2021 remains to draw at least 1.5 million tourists to Maldives, for which the country must either maintain an average of 4000 arrivals daily throughout the year or experience a significant influx during foreign holiday periods.