The current foreign exchange liquidity constraints in the Maldivian economy are primarily a consequence of excessive currency printing and substantial debt accumulation by the previous administration. Furthermore, the volatility in global oil prices due to conflicts in the Middle East and the subsequent decline in tourist arrivals have further hindered foreign currency inflows. While the scarcity of dollars at official rates stems from commercial banks’ inability to meet demand, the central bank has taken corrective measures by increasing dollar allocations to banks by 51 percent.
According to statistics shared by the Minister of Economic Development and Trade, the current administration has significantly increased the volume of foreign currency facilitated through banks for public needs compared to the previous government. On average, USD 81.2 million was disbursed monthly during the first seven months of this year. This initiative demonstrates the government’s commitment to easing access to foreign exchange for essential requirements, such as medical treatment and education, while simultaneously managing the repayment of significant sovereign debts.
