USD skyrockets past MVR 21.25 as black market pressures mounting public and local businesses
Rising dollar rates on the black market are causing Maldivian businesses to hike prices, threatening their survival. Despite a parliamentary supermajority and campaign vows to stabilize the currency, President Muizzu's administration faces criticism for reserve mismanagement while blaming the previous government for the ongoing economic crisis.
Maldives coin on top of dollar bills. | iStock
The exchange rate for the U.S. Dollar on the unofficial market has surged beyond MVR 21.25, contradicting previous promises made by the current government that rates would remain controlled.
This sharp decline in the value of the Maldivian Rufiyaa relative to the dollar has driven up the cost of basic consumer items.
Small and medium-sized enterprises are struggling under the weight of these exorbitant rates, with proprietors stating that the lack of official currency access leaves them no choice but to buy overpriced dollars on the black market.
To cover these expenses, merchants have had to double their retail prices, leading many to warn that their operations are on the brink of failure.
The acute shortage of foreign currency is unfolding alongside official claims of record-high debt repayments.
Critics, however, argue that the administration has mismanaged national foreign reserves and failed to obtain essential funding from abroad.
Stabilizing the dollar rate at MVR 15.42 was a major campaign promise of President Dr. Mohamed Muizzu.
As the rate continues to climb, both President Muizzu and Economic Minister Mohamed Saeed have deflected blame for the downturn onto the alleged missteps and actions of the prior MDP government.
In addition to this, Minister Saeed had earlier maintained that securing a legislative majority for the ruling People’s National Congress (PNC) would cause the dollar rate to drop.
However, even with the administration now possessing a parliamentary supermajority, the exchange rate continues its upward trajectory, generating broad public and professional backlash over the government's handling of the economy.
