Former President Abdulla Yameen has warned that if the Maldivian economy continues on its current trajectory, the exchange rate for the US dollar could surge past MVR 21 within this year.
The black market rate for the dollar currently stands at MVR 20.50, marking an all-time high. This peak follows a prolonged period where the rate remained consistently above MVR 20, driven largely by a downturn in the tourism sector.
Speaking at a meeting hosted by the People’s National Front (PNF) on Thursday night, Yameen countered government claims that commodity prices would remain stable. He argued that as a nation heavily reliant on imports, it is impossible to prevent price hikes under the current economic conditions.
"If things continue this way, I am predicting the rate could reach MVR 21 or higher by the end of the year. Despite this, government officials insist that prices are not rising. They need to explain how that is possible when we import everything and the dollar has strengthened so much against the Maldivian Rufiyaa," Yameen said.
The former president further noted that the government has halted all capital expenditure projects, leaving island development at a standstill. He claimed the government is utilizing its limited dollar revenue solely for essential obligations, such as debt servicing.
"There are no capital investment projects currently underway. Every dollar the Ministry of Finance receives is being used as a temporary fix for immediate pressures. Where is the vision in this? Ninety-five percent of any major project in the Maldives requires foreign currency," Yameen added.
Although President Mohamed Muizzu previously said that the implementation of new foreign exchange regulations would stabilize the dollar, the market rate has consistently remained above MVR 20 since the policy was introduced.
