Maldives Currency in Danger as Dollar Rises

  • Maldives
  • Travel
  • Business
PUBLISHED 22 August 2023

The Maldives is witnessing a worrisome surge in the value of the dollar on its black market, with exchange rates hovering between MVR 18.10 and MVR 18.30 per dollar. This upswing represents the highest point the dollar has reached on the black market since the beginning of the year.

Currency traders attribute this sharp appreciation of the dollar to the dwindling availability of local currency in the nation. Notably, even currency exchange agents are securing dollars at significantly elevated rates compared to just a few weeks ago.

Moreover, the surge in tourist arrivals in the Maldives is also identified as a contributing factor to the dollar's ascendancy. Tourists are increasingly opting for card payments, consequently driving up the demand for dollars.

The prevailing circumstances suggest that the dollar's upward trajectory might persist in the weeks to come, unless substantial measures are taken to improve the accessibility of local currency in the Maldives.

Addressing this challenge requires a multifaceted approach to mitigate the impact on the economy. Firstly, the Maldivian government could explore measures to enhance the inflow of local currency, potentially through strategic partnerships with international financial institutions. This would bolster the liquidity of the local currency and help stabilize its value against the dollar.

Additionally, fostering an environment conducive to investment could attract foreign capital, thereby increasing the availability of foreign exchange reserves. Encouraging sectors such as sustainable tourism and emerging industries could be instrumental in achieving this goal.

Furthermore, promoting financial literacy among locals and tourists alike might encourage more prudent currency management, which could alleviate some of the demand pressures on the dollar.

In conclusion, the escalating dollar value in the Maldives' black market, coupled with declining cash availability, necessitates prompt action. By implementing a combination of measures to enhance local currency liquidity, attract foreign investment, and encourage responsible currency usage, the Maldives can work towards restoring stability to its currency exchange landscape and safeguarding its economic well-being.