US dollar exchange rate could hit MVR 20 by year’s end, warns JP Leader Gasim Ibrahim

Local business tycoon, media owner, MP,  Jumhoree Party (JP) leader and member of the Judicial Services Commission (JSC), Gasim Ibrahim, has warned that the dollar exchange rate of the Maldivian rufiya may rise to MVR 20 by the end of the year – a 25 percent increase.

Speaking at a press conference on Sunday, Gasim told local media that the main reason for the Maldivian currency to go down was “selling Ibrahim Nasir International Airport to GMR, selling the shares of Dhiraagu, and the Maldives Water and Sewerage Company.’’

Gasim claimed the three companies were now taking US$2 billion dollars out of the country annually.

At the press conference, Gasim – who also operates domestic airline Villa Air, under the FlyMe brand  – alleged the former government had not awarded the airport to GMR in a way that would benefit the citizens, and expressed concern over increased fuel prices and landing fees.

Gasim’s comments follow GMR’s suspension of Villa Air’s credit facility due to unpaid bills of MVR 17 million (US$1.1 million) for fuel, ground handling and passenger service fees, according to local media reports on Saturday.

His concern over currency devaluation follows the former government’s managed float of the rufiya within a 20 percent band of the pegged rate of MVR 12.85.

In April last year, then-Finance Minister Ahmed Inaz explained that the government decided to change the fixed exchange rate to a “managed float” to shape government policy towards increasing the value of the rufiya and ultimately bring the exchange rate down to MVR 10 – an oft-repeated pledge of former President Mohamed Nasheed.

The worsening balance of payments deficit could not be plugged without allowing the market to set the exchange rate, Inaz continued, adding that through lowering the fiscal deficit and spurring private sector job growth “a path would open up for us to reach the lower band (MVR 10.28).”

“My estimate is that it will take about three months for the market to stabilise and reach a balanced [exchange] rate,” he said.

Following this decision of the former government the then opposition Dhivehi Rayyithunge Party (DRP), which has since divided into two factions, held protests in the streets of Male’ against the decision.

The International Monetary Fund (IMF) however praised the Maldives’ decision to effectively devalue its currency as a  “bold step by the authorities [representing] an important move toward restoring external sustainability.”


24 thoughts on “US dollar exchange rate could hit MVR 20 by year’s end, warns JP Leader Gasim Ibrahim”

  1. It is true that huge amount of money are taken out by GMR and Dhiraagu .

    Airport was earning huge amount of dollars and those dollar income was directly getting into our economic system and it gets circulated there .

    we are talking of around 600 million dollars circulation from airports company in the past and out of this only around 200 million dollars goes out to pouches fuel and rest are get circulated within our system.

    This is major reason for the shortage of dollars in our economy .

    Now what is happening is 99% of the income will be disbursed back to India since 99% of airport is owned BY GMR .

    I do not blame GMR but it is because of corrupted deals done by previous government .

  2. this indicates this country is goin towards the backwardness.once govt will take this step next day thy will leave this country without doctors,nurses and teachers.instead of strengthen the currency of maldivies they are making it weaker.

  3. just adopt the dollar as the official currency and do away with the Rufiya which is worthless on forex markets.

  4. In other words, give Gasim the airport dollars so he could store them in his foreign accounts.

  5. Why MMA governer is hush on

    Economy is collapsing and rich man deciding policy. What's happening?

  6. There are over 100 resorts each cashing in large sums of dollars but these dollars do not circulate as it should in our economy because most resorts are foreign owned. Those resorts owned by locals with business interests based in Maldives, biggest one of them all being gasim, is too damn greedy when he sees an opportunity to sell his dollars to the public, so he artificially raises the price n sells his dollars at a high price to locals who have no access to dollar income. This is why there never is or was a dollar shortage in Maldives, no matter what amount u would get it as long as the price was right! So gasim stop talking about stupid economics n pretend to be a saint or shift blame when u have your hand in the cookie jar. Thank you Laura

  7. @Wrong. Most resorts are NOT owned by foreigners. Locals own most resorts, but what? does it make a difference?
    let me tell you the difference.
    Foreign managed resorts generally pay their staff better salaries, so this money goes in to circulation, whereas locally owned resorts like universal or villa resorts, the money they make, very little of trickles down to workers. so resort ownership shall not be an issue.
    the solution i can see is to mandate that 80% or 90% of workers shall be locals and impose this or similar provision on tourism industry. that way a lot of money can be retained in the country. that's just one way.

  8. +1 for ditching this useless currency and adopting the USD which is accepted world wide. Right now all it does is separates the locals from the foreigners.

  9. "Local business tycoon, media owner, MP, Jumhoree Party (JP) leader and member of the Judicial Services Commission (JSC), Gasim Ibrahim"

    I think that this opening line is quite interesting. It would seem to me there is a great deal of conflict of interest in anything he would have to say on most subjects.

  10. What do our smart financial analysts have to say about this predicted plummeting of the Rufiyaa against the US dollar?

    Should this really happen, blame it on the Govt. for bad financial policies and poor planning.

  11. This man is an imbecile. The sooner he is put away or further he is away from the political scene the better for Maldives.
    This is the man, who destroyed the economy of Maldives, as Finance Minister under Gayoom.
    We do not need any Lauras in Maldives, thank you.

  12. I see that we have quite a few arm chair economists and pundits here. Gasim is a fool and if you'd like to follow an idiot, that's your choice, of course.

    Let's look at facts, shall we? Gasim claims that GMR, Dhiraagu, and the Maldives Water and Sewerage Company are taking out US$2 billion out of the country. We all know that Gasim is not an educated man, but most people do not realise how very ignorant this guy really is. Let's examine his latest outburst of ignorance.

    Take a look at the GDP growth of the Maldives since 1980 ( . The last figures we have for 2011 suggest that the GDP for the Maldives in 2011 stood at US$2.0501 billion and is a downward trend from 2010. If Gasim is to be believed, then 3 companies are responsible for the entire GDP of the Maldives!

    Now, Tourism, Maldives' largest economic activity, accounts for 28% of GDP and more than 60% of foreign exchange receipts ( So, in one fell swoop, Gasim has totally ignored the biggest foreign exchange earning sector of the economy, because he happens to be involved in that!

    There may be some fools in the country who can be tricked by Gasim, and his inability to decipher basic facts, but showing his ignorance at this level is just laughable. Let's look at some more facts, shall we?

    "Falling tourist arrivals and fish exports, combined with high government spending on social needs, subsidies, and civil servant salaries contributed to a balance of payments crisis, which was eased with a December 2009, $79.3 million IMF standby agreement. However, after the first two disbursements, the IMF withheld subsequent disbursements due to concerns over Maldives' growing budget deficit. Maldives has had chronic budget deficits in recent years and the government's plans to cut expenditures have not progressed well." Source:

    Those are the real facts about the economic crisis facing the country and have absolutely nothing to do with GRM, Dhiraagu or MWSC. In fact, these companies probably contribute more to the Maldivian economy than Gasim or his businesses have ever done!

    For the sake of the Maldives, I do sincerely hope there are people who can see through this fool.

  13. Umar Naseer, time you went back on the streets with your "Dollaru aguboduvanee rayyithun hanaavanee" mob.
    lol. What an idiot gasim, barahanaavaa iruves aga thalhanvey dhoa.

  14. Imagine the Maldivian government increased the salaries to MRF2,000,000 per month to the lowest paid staff. Now do you think all Maldivians can exchange this to USD129,000 per month at the rate of USD1=MRF15.42? Is it easy to see that people who own USD no longer values MRF the same as the day before, whatever the government may say is the legal exchange rate?

    The same effect still holds true for all salary increases without a deserving productivity increase. Now try to remember what the average Maldivian salary was a few years ago when 1USD=apprx MRF10. Public salaries have exploded 500 to 1000 percent. Exchange rate has only been adjusted by about 50%. The difference will be explained by 1) productivity increase and, 2) supply shortage of USD.

  15. The biggest money suckers are Gasim Thasneem and Golhaa familiy in the form of corrupt bank loans. Thats why BML and the whole country is going bankrupt.

  16. The Laura has once again used scaremongering tactics. Just few months ago The Laura said the country had no money to pay October's salary.

    The moment The Laura had installed his puppet Jamsheed as Transport Minister he was adamant that GMR should be kicked out of the Maldives and that our airport should be nationalised. And, The Laura was spewing out national sentiments.

    However, when GMR decided that The Laura's company Villa Air should not be offered any more credit facilities until it paid up all the outstanding debt amounting to millions of Rufiya, The Laura had pulled the strings of his Minister and asked him to be soft and smiling.

    As a result, all of a sudden Minister Jamsheed gave green light for GMR to proceed with construction of the new terminal building which was until then stopped under orders from The Laura.

    Now the deal is GMR can go ahead attending to its its projects at our International Airport while The Laura's puppet Minister of Transport would not try to stop them as long as GMR continues giving support in the form of credit facilities to The Laura's Villa Air.

    The Laura, you are the patriot we need. Your companies' nationalism supersedes our nationalism. One day we may not be surprised to see you announcing that in Villa companies, you will be using Villa Rufiyaa.

  17. Oh look, is this a motivated reason to change the airport management to a friendly one where I don't have to pay my bills.

    VILLA AIR owes 1.1million USD to the airport managers GMR for fuel and landing fees.

  18. Mr. Gasim Ibrahim with due respect, is a hardworking man, foolish and very vulnerable to flattery! He can very easily be won by flattery!

    Everyone around him knows this and are taking the best advantage of it!

    The fact here can be anything! But what is not told here is the fact he himself is a part of this crooked market that is formed!

    Gasim, Champa and some other people in tourism business can and will do anything to earn an extra buck to their already steady pockets!

    Similar to the "Builderberg" people, these people can very well foresee whats coming!

  19. Instead of Ibrahim Nasir International Airport name the Airport as Gasim Ibrahim International Airport and all economy will be stabilised

  20. making the poor, poorer & rich, richer.the ousted president start the currency collapsed now making it worst.


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