The rufiyaa is the official currency of the Republic of Maldives. The Maldives, also called the Maldive Islands, is a nation of 26 islands off the southwestern coast of India in the Laccadive Sea. The rufiyaa is a decimal currency subdivided into 100 laari. The name of the currency derives from the Hindi word rupiyaa, which comes from the Sanskrit word for silver. The rufiyaa began circulating in 1947, when the currency became the standard over the preexisting laari. Today, the rufiyaa is issued by the central bank of the Maldives, the Maldives Monetary Authority.
The first currency used in the Maldives was cowry shells, which were replaced in the 17th century by strips of inscribed silver wire. Soon, coins came to be used and began to be denominated in laari in 1913. For a period between 1914 and 1960, the Ceylonese rupee circulated alongside laari coins, and in 1947 a series of rufiyaa-denominated banknotes was issued. The Ceylonese rupee was withdrawn in 1960 after a new minting of laari coins was put into circulation in 1961.
The rufiyaa did not become the sole official currency of the Maldives until after the establishment of the Maldives Monetary Authority (MMA) in 1981. The MMA became the nation’s central bank and began by issuing a new 1-rufiyaa coin and a new series of banknotes. The MMA was charged with issuing the nation’s currency, promoting its stability, supervising the financial sector and implementing monetary policy. A 2007 amendment to the original MMA Act of 1981 provided the Maldives Monetary Authority with autonomy from the Ministry of Finance. Previously, the Finance Minister also served as governor of the MMA.
The Maldives is a renowned tourist destination, with tourism accounting for 28 percent of the nation’s GDP. Tourism and import/export industries opened up in 1989 after economic reforms were put into place by the government, and annual GDP growth has averaged 7.5 percent over the last decade. The second-largest economic sector after tourism is fishing. The only decline in the economy came in 2005 after the devastation of the tsunami in December 2004. However, foreign investors quickly rushed in to rebuild resorts, and the economy showed an 18 percent increase in 2006 after the 3.6 percent decrease the year before. The Maldives has the highest GDP per capita of any country in South Asia.