The long expected devaluation of local currency Rufiya has happened with an official range of 10.28rf to 15.42rf per 1$ announced yesterday. The immediate implications of this exchange hike would be a jump in consumer goods prices so one Rufiya would have less buying power than it had one day ago. This measure was enacted by president Anni with consultations of financial experts to curb a thriving black market for dollars at higher than official figures for exchange rate. The official storyline is that although there will be a lift in consumer goods prices in the short term, the crisis will pass and that dollar to Rufiya rate will fluctuate on a daily basis and everyone will live happily ever after. However with the current political realities its difficult to believe this measure will go unchallenged by the opposition.
The implications of this dollar exchange rate will be negatively felt by resort workers in resorts where the staff are paid their salaries in Rufiyas. Although there is no real reason for resorts to pay salaries in Rufiyas, several resort do exactly that. This is despite the fact that all the revenues generated in the resorts are foreign currency.
The construction industry will also be affected by this exchange rate measures, which hopefully will consider offering more work opportunities for local workers. The current model for construction industry is to employ illegal immigrant workers at near extortion rates for back breaking work and to employ only illegal immigrant workers (because they will be unlikely to pursue their rights in official channels) to do the job all the while saying local talent is unavailable. Nothing can be further from truth. Locals are as or more willing to work for a reasonable pay which the ‘construction industry’ does not seem inclined to give.
Ultimately, the solution to dollar shortage in the country is to adopt more financial reform measures which will be fought with on every step of the way by our opposition political parties which has only mission in office; to oppose the government weather its right or wrong!