The US dollar rose to a record MVR 20.20 in the black market on Thursday, surpassing its previous high during the COVID-19 pandemic, according to market sources.
The unofficial rate marks the highest ever recorded in the country, exceeding the nearly MVR 20 levels seen in 2020 when border closures and a collapse in tourism battered the economy. At the time, the exchange rate was considered extraordinary due to global shutdowns and a drop in tourism revenues.
The current surge comes in the wake of a new regulation mandating resorts and guesthouses to convert 20% of their foreign currency earnings into Maldivian Rufiyaa through local banks. The government says the measure is aimed at easing dollar shortages and shoring up liquidity. But industry groups and critics argue the move favours state-owned enterprises and government spending, while tightening access to hard currency for the wider private sector.
Despite repeated assurances from President Mohamed Muizzu and Economic Minister Mohamed Saeed that the exchange rate would remain stable or even fall, the market trend has moved in the opposite direction.
The official exchange rate remains fixed by the Maldives Monetary Authority (MMA) at MVR 15.42 per dollar, within a permitted band. However, actual transactions in the private market, especially outside banking channels, are reflecting a growing mismatch between demand and supply.
Analysts say that unless structural dollar inflows increase or policy adjustments are made, black market rates may remain high, posing risks to inflation and business confidence.