The People’s Majlis has passed major amendments to the Foreign Exchange Act, requiring resorts to convert 40% of their foreign currency revenue into Maldivian Rufiyaa through commercial banks, while introducing tougher penalties for illegal dollar trading and the promotion of black market exchange rates.
The government-sponsored amendment, submitted by Holhudhoo MP Abdul Sattar Mohamed, was passed on Wednesday with 47 lawmakers voting in favour and 12 against.
40% conversion requirement
A key amendment proposed by Funadhoo MP Mohamed Mamdhooh requires Category A tourist establishments, including resorts, to exchange 40% of their foreign currency revenue through banks.
The measure is aimed at increasing the amount of foreign currency entering the official banking system as authorities intensify efforts to curb the parallel dollar market.
Up to MVR 1 million fine for black market trading
Under the amended law, selling or attempting to sell foreign currency above the official MMA exchange rate or permitted exchange-rate bands will be an offence.
Violators can face fines ranging from MVR 25,000 to MVR 1 million.
Promoting illegal dollar rates also prohibited
Advertising or promoting exchange rates outside the MMA-approved rate or band, including through digital platforms and other public channels, will also be prohibited.
Individuals can face fines of MVR 25,000 to MVR 500,000, while businesses and other legal entities involved in such offences may face penalties ranging from MVR 100,000 to MVR 5 million.
The amendments also empower the MMA to determine and impose fines on parties providing unauthorised or illegal foreign exchange services.
The Maldives Association of Tourism Industry (MATI) had previously raised concerns over the proposed conversion requirement and sought a lower threshold.
The passage of the amendments marks a significant strengthening of the Maldives’ foreign exchange regime, with the government seeking to channel more tourism-generated dollars through the formal banking system and clamp down on illegal foreign currency trading.
