What Is the Maldivian Rufiyaa (MVR)?
The Maldivian rufiyaa (MVR) is the national currency of the Republic of the Maldives. The rufiyaa is made up of 100 subunits, called laari, and is represented by the currency symbol Rf. The name rufiyaa is derived from the Hindi Sanskrit word rupya, meaning "silver."
- The Maldivian rufiyaa is the currency of the Maldives.
- It entered circulation in 1947, replacing the Sri Lankan rupee.
- The economy of the Maldives is heavily reliant on tourism, comprising about 60% of total exports.
Understanding the MVR
The modern rufiyaa was brought into circulation in 1947, when it replaced the Sri Lankan rupee at a value of 1-to-1. Initially, this change only applied to the rufiyaa’s paper banknotes, with its coins only beginning circulation in 1983. The laari, however, has a history in the Maldives dating back to the 1800s. Control of both the coins and the banknotes falls under the authority of the Maldives Monetary Authority, the central bank of the Maldives.
Today, the most commonly used forms of the rufiyaa are the 1, 2, 5, 10, 25, and 50 denomination coins. For the banknotes, popular varieties include the 5, 10, 20, 50, 100, 200, and 500 denomination issuances. Historically, the inhabitants of the Maldives used cowrie shells, which are derived from sea snails, as a type of currency. Later, strips of silver were used, with the earliest coins appearing in the 1600s.
Modern rufiyaa banknotes are illustrated with scenes and symbols representing the culture and history of the Maldives. The 5 rufiyaa note, for example, includes people playing soccer, a popular pastime in the country. The 10 rufiyaa note features men and women dancing while playing traditional drums, while the 100 rufiyaa note depicts locals wearing traditional clothing.
Real-World Example of the MVR
Between August 2011 and December 2020, the value of the rufiyaa has been approximately $0.065 U.S. dollars (USD) for every 1 rufiyaa. Like all national currencies, the strength of the rufiyaa is ultimately based on the economy of its issuing country. In the case of the rufiyaa, the economy of the Maldives is very heavily dependent on tourism, which comprises roughly 60% of Maldivian foreign exchange. Food products, such as fish fillets and other fish products, used to comprise a relatively large share of Maldivian exports, although their importance has faded relative to tourism in recent years.
Overall, the Maldives is considered a success story in regard to its economic development. In 1989, the government began working toward economic reforms to expand exports and encourage foreign investment. At one time, fishing was the primary driver of the Maldivian economy and provided nearly 90% of the country's income. Today, tourism shoulders much of the load. A tsunami in 2004 damaged the industry, but it has since rebounded. In the early 1980s, the Maldives ranked as one of the top 20 poorest countries in the world. But according to the World Bank, the Republic of the Maldives has since become an upper-middle income country.