Dollar rate surges beyond MVR 19 in parallel market

The rate of a US dollar has risen above MVR 19 in the Maldives' black market, with some transactions reportedly reaching MVR 20.

A large importer, speaking to Atoll Times on Sunday on the condition of anonymity, said it is increasingly difficult to source dollars through formal channels.

"You can't get dollars from banks now. This will lead to higher prices for goods," the importer stated.

The importer further explained that banks have reduced the dollar amounts available for telegraphic transfers (TTs) due to the tight supply.

"Previously, a $100,000 TT would yield $10,000, but now it has been reduced to $5,000," he said.

The rising demand for dollars is expected to continue in the coming months, especially as the month of Ramadan approaches and many individuals travel for Umrah or holidays in December. This trend is anticipated to increase the cost of certain goods ahead of Ramadan.

"Prices will not decrease if dollars are this expensive," the importer noted.

Market sources attribute the rise in dollar prices to limited availability. The situation intensified after resorts expressed opposition to the central bank's rule requiring them to exchange $500 per tourist at a local bank. As a result, some resorts have stopped paying employees in dollars, and several local companies have ceased paying bills in dollars.

A study suggested that if the Maldives Monetary Authority (MMA) maintains its current policy, the dollar rate may rise to MVR 19.50 in the first year and MVR 21.70 in the second year.

Despite resistance from resorts, the government and the MMA have reiterated their commitment to the policy and confirmed that no changes will be made.