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The central bank's proposed overhaul aims to plug major foreign exchange loopholes by requiring all resorts to surrender 20 percent of their total USD revenue, potentially injecting an estimated $100 million annually into the banking system to fight growing parallel market inflation.
News Desk
MALÉ: The Maldives Monetary Authority (MMA) has submitted proposed legislative amendments to the Attorney General’s Office to reform foreign exchange rules, removing the flat-rate option for tourist resorts and mandating a fixed percentage conversion rate.
The central bank confirmed that the bill is expected to be forwarded to the People’s Majlis for parliamentary review shortly.
Under current laws introduced early last year, “Category A” tourism establishments—which include resorts—have the choice to either exchange $500 per tourist arrival or convert 20 percent of their total monthly dollar revenue through local banks. The proposed change will eliminate the $500 per head option, requiring all resorts to convert 20 percent of their total monthly income.
Category A (Resorts): Removes the option to exchange $500 per tourist; obligates all resorts to convert 20 percent of total monthly foreign currency earnings.
Estimated Market Impact: MMA forecasts the change will channel an additional $100 million annually into Maldivian commercial banks.
Category B (Guesthouses): Rules remain unchanged; guesthouses can still choose between converting $25 per tourist or 20 percent of monthly sales.
Category C (Non-Tourism USD Earners): The annual revenue threshold for mandatory USD surrender has been raised from $15 million to $25 million, providing relief to smaller non-tourism businesses.
According to an MMA official, the reform addresses disparities under the current system. High-end luxury resorts charging thousands of dollars per night were previously able to convert significantly lower proportional revenue by choosing the flat $500 per tourist option compared to mid-range resorts.
The central bank’s policy push comes at a time when parallel market exchange rates have reached historic highs, with the US Dollar trading above MVR 22. As the Maldives relies heavily on imported food, fuel, and commodities, central bank officials view channeling more dollars into the formal banking system as a vital step toward curbing parallel market pressures and stabilization.
