Prominent businessman and social advocator Ahmed Arif (Artey) has warned that the Maldivian Rufiyaa to U.S Dollar exchange rate may spike up to 20 Rufiyaa to the Dollar and more. The owner of the “Lotus” shops in Maldives tweeted saying that the resumption of tourism activities may not find much support in terms of income and that it may cause further devaluation in the Currency.
He warned that if tourist arrivals are low upon resumption, the strain on the market would cause the rufiyaa to plunge. While U.S dollar rates have been 10.24% higher in the black markets than the legally pegged rate of 15.42 since February 2019, the COVID 19 pandemic and following lockdown has only further wreaked havoc on the already failing economy with some complaining of shortages on dollar as far as back in January 2020.
Financial experts have warned that Maldivian Rufiyaa might inflate if authorities fail to take proper counter measures against it. Recent agreements with IMF and WB has shown that they have warned against the government’s decision to borrow from the central bank, which in 2007 resulted in a similar currency devaluation. This combined with the low income to the state from both SOE’s and from taxpayers has created doubt on the stability of the economy.