Analysis of monetary policy, exchange rates, banking, financial markets and the institutions and policies shaping monetary and financial conditions in the Maldives.
Before pursuing policies aimed at reducing the economy’s reliance on the US dollar, it is essential to understand why dollarisation exists in the first place and under what conditions successful de-dollarisation has been managed elsewhere.
Dhathivejje puts inflation and the black-market dollar at the centre of public attention. Behind those pressures lie deeper questions about the exchange-rate peg, fiscal and external deficits, public spending, reserves and who ultimately bears the cost of economic adjustment.
The widening gap between official and parallel exchange rates has intensified debate over the future of the Rufiyaa. This article examines whether greater exchange-rate flexibility could work in the Maldives, and why reserves, fiscal discipline and foreign-exchange liquidity matter for any transition.
Central bank independence is more than an institutional principle. For the Maldives, where foreign exchange pressures and fiscal constraints remain significant, the credibility and autonomy of the Maldives Monetary Authority are closely linked to confidence in the Rufiyaa and wider economic stability.
The growing interdependence between government finances and the banking sector is creating systemic risks for the Maldives. High public debt and banks’ exposure to sovereign securities could transmit fiscal stress directly into financial instability.
