MVR - Maldivian Rufiyaa

The history of the formation and development of the Maldivian Rufiyaa (MVR)

In the early period in the Maldives, currency transactions were conducted using cowrie shells. Because the mother-of-pearl shells were highly valued in international trade at that time.

In the 17th and 18th centuries, a new form of currency called lārin was used in transactions in the Maldives and could be exchanged for cowrie shells. Sultan Ghaazee Muhammad Thakurufaanu al-Auzam was the first to imprint his seal on this currency.

The first minted coins appeared in the Maldives, introduced as pure silver and minted in the capital, Malé. In 1787, gold coins replaced silver coins used in the Maldives.

In the 19th century and early 20th century, copper coins were also issued. Later, the Maldives switched to using the Ceylon rupee.

In 1947, the Maldives issued the Maldivian Rupee banknotes, which were equivalent in value to the Indian Rupee.

In 1960, the laari coin was introduced, currently valued at one-hundredth of a rufiyaa.

The meaning of the currency symbol for the Maldivian Rufiyaa

On July 3, 2022, the Central Bank of Maldives introduced the currency symbol for the Maldivian Rufiyaa. This symbol is based on the letter Ra in the Thaana alphabet. This is the first letter of the word Rufiyaa in Dhivehi with an added horizontal line to symbolize the equal sign in many other currency symbols.

This design was created by Mr. Hassan Shujau after winning the competition organized by MMA. Selected from 70 proposals and evaluated by a professional committee.

Maldivian Rufiyaa (MVR) Denominations

Currently, the denominations of the Maldivian Rufiyaa are issued as follows:

Maldives Rufiyaa banknotes

• Frequently used: 5, 10, 20, 50, 100, 500 rufiyaa

• Rarely used: 1,000, 5,000 rufiyaa

Maldives Rufiyaa coins

• Frequently used: 25 laari, 50 laari, 1 rufiyaa, 2 rufiyaa

• Rarely used: 1, 5, 10 laari

Maldivian Rufiyaa (MVR) exchange rate

The current exchange rate of the Maldivian Rufiyaa against the US dollar is approximately:

15 MVR = 1 USD

Compared to the currencies in the region, the Rufiyaa has a lower value. However, this country has a developed tourism industry, making it an attractive destination for international travelers. Therefore, in the future, the value of the Maldivian Rufiyaa may improve.

Factors affecting the value of Maldivian Rufiyaa (MVR)

The Maldivian Rufiyaa is influenced by various factors both domestically and internationally. Specifically as follows:

Tourism is the key economic sector of the Maldives

Tourism contributes about 30% of GDP, bringing in a significant amount of foreign currency from international visitors. Therefore, the growth or decline of the tourism industry directly affects the value of the Maldivian Rufiyaa. If the number of tourists increases, the inflow of foreign currency into the Maldives will rise, helping to enhance the value of the MVR.

Inflation rate

In the Maldives, high inflation rates are causing the value of the Rufiyaa to decrease. Because when the prices of goods and services increase, the purchasing power of the local currency decreases, causing the Rufiyaa to depreciate against other foreign currencies. The Maldives government needs to implement measures to control inflation in order to stabilize the value of its currency.

Exchange rate and monetary policy

Maldives implements exchange rate controls and maintains a stable monetary policy. In this, the Central Bank of Maldives plays an important role in managing exchange rates and interest rates to ensure the stability of the Rufiyaa.

The prices of imported raw materials

Maldives is heavily dependent on the import of fuels and food. Therefore, if the prices of imported goods rise, it increases production and consumption costs, which in turn decreases the value of the Rufiyaa. 

Global economic fluctuations

The fluctuations of the global economy, including factors such as financial crises, economic recessions, or volatility in the foreign exchange market, can also have a negative or positive impact on the value of the Rufiyaa. If the USD strengthens, the Rufiyaa will depreciate against the USD.

Thus, factors ranging from tourism development to international fluctuations all play a significant role in influencing the value of the Maldivian Rufiyaa.

Future of the Maldivian Rufiyaa (MVR)

The future of the Maldivian Rufiyaa (MVR) hinges on several critical factors, including macroeconomic stability, tourism recovery, and prudent fiscal management. As the Maldives continues to navigate the challenges posed by global economic fluctuations and climate change, a robust policy framework will be essential to bolster investor confidence and enhance monetary stability. Additionally, ongoing efforts to diversify the economy beyond tourism could provide a more resilient foundation for the Rufiyaa, enabling it to withstand external shocks and maintain its value in an increasingly interconnected world. The effective management of currency fluctuations will be crucial in sustaining the economic welfare of the Maldives and ensuring that the MVR retains its purchasing power over time.