Male, Maldives — In a significant financial development, The Maldives Journal has learned that the Government of India has proposed an advisory to the Maldivian administration suggesting an adjustment in the exchange rate of the Maldivian Rufiyaa (MVR) to the US Dollar (USD). The recommended rate stands at MVR 25 per USD, a marked shift from the current official rate of MVR 15.42 per USD.
Interestingly, while the official rate remains at MVR 15.42, black market traders have been noted to exchange at a higher rate of MVR 18.5 per dollar, highlighting a disparity between official and actual market rates.
The Maldivian economy, largely dependent on tourism, has recently witnessed a record number of tourist arrivals. Despite this influx, the demand for the US dollar remains strikingly high. Analysts and financial experts attribute this rising demand primarily to the government's extensive money printing activities, flooding the economy with excess Rufiyaa. The consequence of such a strategy is an inflationary pressure, leading to an increase in demand for stable foreign currencies like the USD.
While critics argue that this uncontrolled money printing and the evident disparity between the official and black market rates indicate an underlying economic instability, the Maldivian government continues to project confidence. Officials have publicly claimed that the nation's economy remains robust and in a healthy state, despite the increasing black market rates.