MDP Chairperson and former President Mohamed Nasheed has called on the government to pause major infrastructure development projects until pressure on the Maldivian rufiyaa eases and the dollar exchange rate stabilizes.
In a post on X today, Nasheed noted that given the country’s current economic condition, state spending should be confined only to essential services owed to citizens. Apart from those services, he advised, no construction project should proceed until the dollar market stabilizes.
Specifically flagging projects already underway but unfinished across the islands, Nasheed said the government should step away from them entirely and hand them over to local councils. Under a cross-subsidy arrangement, he believes, councils could organize and complete these projects themselves.
His call comes as the black-market rate for the dollar has climbed to MVR 21.25 and settled at a record high. Business analysts attribute the foreign currency squeeze to this year’s heavy debt repayments, a slowdown in new investments, and difficulties the government has faced in securing foreign loans.
The Maldives Monetary Authority (MMA) has also disclosed that the state’s foreign reserves and usable reserves are falling sharply, driven by extremely high dollar demand from banks and importers. MMA figures further show that the volume of dollars sold into the market last month to defend the rufiyaa was 43 percent higher than the previous month.
