Former President Mohamed Nasheed has said that the failure to lower the dollar exchange rate is due to the absence of a comprehensive debt restructuring program.
Nasheed, who also serves as the Chairperson of the opposition Maldivian Democratic Party (MDP), noted in a post on X that the lack of a restructuring plan, combined with the failure to reduce dollar expenditure, has prevented the currency's value from stabilizing.
"The price of the dollar is not decreasing because there is no proper debt restructuring program in place, and dollar spending remains high," Nasheed said.
The market rate for the US dollar currently stands at MVR 20.50. Financial experts warn that the rate is likely to climb to MVR 21 before the end of the year.
The Maldives has already repaid a USD 500 million Sukuk this year. Additionally, more than USD 500 million in foreign debt remains due for repayment within the current year.
President Mohamed Muizzu assumed office, claiming to have a clear plan for debt repayment. However, due to inconsistencies in his foreign policy, foreign aid and loans have fallen short of projected figures.
Despite the knowledge that record debt repayments would be due this year, the lack of a sound plan has been compounded by the challenges posed by the US-Iran conflict.
The closure of the Strait of Hormuz by Iran during the conflict, along with attacks on airports in the UAE and Qatar, has led to a sharp decline in both imports and tourist arrivals to the Maldives.
Although the war has caused severe economic strain, the government has delayed implementing austerity measures due to political reasons.
