In a decisive move to fortify the nation’s foreign exchange reserves and stabilize the Maldivian Rufiyaa, the Maldives Monetary Authority (MMA) has announced a significant policy adjustment. Effective June 1, 2025, banks will be required to sell 90% of their acquired U.S. dollar proceeds to the central bank, a substantial increase from the previous 60% mandate .
This policy change, enacted under Article 13(a) of Law No. 2024/32 (Foreign Currency Act), aims to enhance the MMA’s capacity to supply foreign currency to businesses, ensuring a more robust and stable economic environment. The central bank emphasized that this adjustment is designed to facilitate a more efficient distribution of foreign currency through its weekly sales to banks .
The Foreign Currency Act, effective from January 1, 2025, categorizes businesses into three groups with specific conversion obligations:
Category A: Includes resorts, integrated tourist resorts, and resort hotels. These establishments must convert either USD 500 per tourist per month or 20% of their gross monthly foreign currency sales.
Category B: Encompasses tourist vessels, tourist hotels, and guesthouses. These are required to convert either USD 25 per tourist per month or 20% of their gross monthly foreign currency sales.
High-Income Entities: Businesses earning an annual foreign currency revenue of at least USD 15 million are mandated to convert 20% of their gross monthly foreign currency sales .
Exemptions are granted for tourists under the age of 12, those staying less than 24 hours, complimentary stays, and government-hosted tourists. Additionally, businesses demonstrating financial constraints may apply for concessions to exchange less than the mandated 20%, subject to MMA’s review .
President Dr. Mohamed Muizzu has lauded the MMA’s initiative, stating that the increased dollar circulation will benefit the general public and small and medium-sized enterprises. He emphasized that these positive changes would result in increased dollar availability for the general public and small and medium-sized enterprises .
As the implementation date approaches, the MMA remains steadfast in its commitment to fortifying the nation’s financial infrastructure. The central bank encourages all stakeholders to align with the new regulations, emphasizing that these measures are pivotal for sustaining the Maldives’ economic resilience in the face of global financial challenges.
