Maldives President Dr. Mohamed Muizzu on Wednesday said the changes proposed to the Foreign Currency Bill will increase US Dollar circulation in the Maldives banking system beyond previous estimates.
The foreign exchange regulation that took effect on October 1 requires tourist establishments to exchange a fixe amount of USD per tourist in local banks. Resorts are required to exchange USD 500 per tourist from the revenue generated for the total monthly tourist arrivals.
However, tourism stakeholders said the fixed USD exchange requirement, regardless of the average daily rate (ADR), duration of stay, the age of guests or special offers, is unfair to tourism establishments.
Stakeholders further argue the regulation disregards the fact that many of these properties pay their expenses in USD.
Despite the criticism, President Dr. Muizzu announced in an event on November 17, that he will not revert the regulation, demanding resorts must surrender USD 500 per tourist to local banks.
The Maldives Monetary Authority (MMA) on Tuesday announced the formulation of a Foreign Currency Bill, which maintains the USD 500 per tourist requirement for resorts, but also offers concessions in foreign currency exchange.
“And as I said on November 17, 2024, the formulation of a Foreign Currency Act at the initiation of the MMA is crucial to strengthening the enforcement of the regulation. With this law, resorts will exchange USD 500 per tourist,” President Muizzu said.
The draft bill also requires non-tourism businesses that generate revenue over USD 20 million per annum to exchange 20% of its annual earnings.
“These conducive changes will provide ordinary citizens and small and medium enterprises with access to more dollars,” President Muizzu added.
The central bank said the draft bill is an improvement on certain aspects of the existing foreign currency regulation.