Maldives central bank governor hints at possible reduction in mandatory dollar exchange

Maldives Monetary Authority (MMA) Governor Ahmed Munawar on Sunday indicated that the mandatory foreign exchange conversion requirement for resorts may be reduced in the future.

Speaking at the annual general meeting of the Maldives Association of Tourism Industry (MATI) at Kurumba Maldives, the governor stated that such a change could take up to two years but remains a possibility.

“If you look at the mandatory exchange, forcing a 20% margin may not be the most desirable. You can review it over two years, conduct research at the micro level, and introduce changes,” he said.

He added that the requirement is unlikely to be reduced in the next two to three quarters. However, adjustments could be made within two years, depending on industry growth and revenue.

During the drafting of the Foreign Exchange Act, MATI proposed setting the mandatory exchange rate for resorts between 10-15%. However, when the law was passed, the rate was fixed at 20%.

Under the Foreign Exchange Act, which came into effect in January:

• Resorts must exchange 20% of their income or $500 per guest.
• Guesthouses, safari vessels, and hotels must exchange $25 per tourist or 20% of their foreign exchange earnings.
• Entities, excluding financial institutions, that received at least $15 million in foreign currency in the previous year for services and goods are required to exchange 20% of their monthly foreign currency income.