Dollar rate speculation rises in parallel market; MMA to hike dollar supply to businesses
The MMA reports that most of the dollars it receives are redistributed to the economy.
The Maldivian Rufiyaa (MVR) has depreciated against the US dollar in the black market, with the exchange rate reaching MVR 20.20 per dollar — the highest level recorded in recent years.
The development comes at a time when the tourism sector is experiencing its traditional off-season. However, a senior official from the Maldives Monetary Authority (MMA), when asked about the situation, attributed the fluctuation to speculation.
“What is happening now is speculation, or people are speculating that the price might be like this,” the official said.
According to figures provided by the MMA, the amount of foreign currency entering the banking system has increased. The MMA has also raised the volume of dollars issued through banks to businesses and the public.
Following the introduction of a policy in October 2024 requiring resorts to exchange 20% of their foreign currency earnings into the local banking system:
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The foreign exchange inflow to banks has risen to 20%, up from an average of 10% over the past four years.
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As of 30 June, USD 362 million had been exchanged in local banks, with the MMA receiving 60% of that amount.
The MMA reports that most of the dollars it receives are redistributed to the economy.
Statistics show that the amount of dollars sold by the MMA to businesses and individuals through banks increased by 14% during the first half of this year. Additionally, banks are now providing up to 30% of requested foreign currency for payments outside the small and medium enterprise sector, a figure the MMA plans to increase to 50%.
The MMA believes that increasing the availability of dollars through the formal banking system will reduce reliance on the black market. Officials say this indicates the current dollar repatriation policy is having an impact.
One of the key reasons for dollar outflows has been debt repayments. Figures show:
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USD 88 million was spent on foreign loan repayments from January 2024 to June 2024.
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USD 172 million was spent on debt repayments this year until June 2025.
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USD 27.5 million has been spent on bond repayments this year.
The central bank stated that the rise in foreign debt payments has affected dollar availability in the domestic market and poses an ongoing challenge.
Despite this, the MMA forecasts that the dollar will not continue to appreciate further. Tourist arrivals have increased by 14% this month compared to the same period last year, with an average of 5,838 daily arrivals. This follows 4,700 daily arrivals last month.
The MMA expects that steady tourism figures will contribute to currency stabilisation in the coming months.
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