The Maldives Monetary Authority (MMA) has reminded businesses and other entities earning foreign currency to fulfil their mandatory conversion obligations under the Foreign Exchange Act, as revised regulations governing foreign currency earnings continue to be implemented.
In a statement, the central bank reiterated that businesses subject to the law must complete the required conversion of foreign currency revenue before the 28th of the month following the month in which the income was received.
MMA encouraged all affected parties to ensure that their conversion arrangements are completed within the prescribed timeframe, highlighting the importance of compliance with the country’s foreign exchange regulations.
The authority also clarified that the names of businesses failing to fulfil their conversion obligations within the stipulated period would be publicly disclosed in accordance with established regulatory procedures.
The reminder comes following amendments to the Foreign Exchange Act introduced in August, which brought significant changes to the foreign currency conversion requirements for tourist resorts.
Under the revised framework, resorts are required to convert 40 percent of their monthly foreign currency revenue through local banks.
Implementation of the amended requirements began on September 1, forming part of the government’s broader efforts to increase the availability of foreign currency within the domestic banking system.
Guesthouse operators, meanwhile, continue to follow the original conversion arrangements, under which they are required to exchange either USD 25 per tourist or 20 percent of their total revenue, depending on the applicable provision.
The changes are intended to strengthen the circulation of foreign currency through Maldivian banks while supporting the country’s wider financial and economic objectives.
Tourism remains the Maldives’ primary source of foreign exchange earnings, generating billions of dollars annually through resorts, guesthouses and other tourism-related businesses.
However, government figures have previously highlighted a considerable difference between the foreign currency generated by the tourism industry and the amount entering the domestic banking system.
According to earlier government statements, the tourism sector generated approximately USD 5.6 billion in revenue last year, of which an estimated USD 3.8 billion entered Maldivian banks.
MMA statistics indicate that only 21 percent of the USD 3.8 billion entering the banking system was converted through banks, equivalent to approximately USD 798 million.
The figures have been cited by the government in explaining the need for reforms aimed at improving the availability of foreign currency through official banking channels.
Before the introduction of the Foreign Exchange Act, the government had also stated that resorts were converting approximately 10 percent of their foreign currency earnings through local banks.
The revised requirements are therefore expected to increase the volume of foreign currency exchanged within the banking system, particularly from the tourism sector.
The Maldives depends heavily on foreign currency to finance imports, facilitate international transactions and meet external financial obligations.
Ensuring an adequate supply of US dollars through domestic banks has consequently remained an important priority for the country’s monetary authorities.
Limited access to foreign currency through banking channels has historically presented challenges for businesses and individuals requiring dollars for overseas payments, education, medical expenses and other international transactions.
The foreign exchange reforms are intended to address these challenges by improving the flow of foreign currency through the formal financial system.
MMA’s latest reminder reinforces the monthly reporting and conversion responsibilities of businesses covered by the legislation.
For example, foreign currency revenue earned during October must be converted before November 28, while revenue received in November must be converted before December 28.
The central bank has called on all relevant parties to complete their required conversions within the designated deadlines and continue adhering to the provisions of the Foreign Exchange Act.
The measures form part of ongoing efforts to strengthen foreign currency management, improve access to dollars through local banks and support greater stability within the Maldivian financial system.
