Male
The Maldives has introduced new foreign currency regulations in response to its ongoing dollar shortage on Sunday, limiting foreign currency transactions and imposing mandatory currency exchange controls on banks and tourism establishments. These measures come as the country grapples with economic challenges following calls for Indian tourists to avoid visiting the nation due to President Mohamed Muizzu’s ‘India Out’ campaign.
Maldives Monetary Authority (MMA) enacted a regulation requiring all foreign currency earnings from the tourism sector to be deposited in local banks. This move aims to stabilize the economy, which is struggling with foreign exchange reserves that do not meet import demands. In August, the MMA had already placed strict dollar limits due to the ongoing dollar shortage.
Under the new Foreign Currency Regulation (2024/R-91), all transactions within the Maldives must be conducted in Maldivian Rufiyaa (MVR), with certain exceptions for foreign currency payments, including exports and legally mandated transactions. The rules stipulate that all tourist resorts and establishments must exchange a minimum of $500 to MVR for each tourist, which can be used for their operational needs.
Failure to comply with these regulations could result in fines ranging from MVR 5,000 to MVR 1,000,000. The Maldives is currently facing a significant debt crisis, with external obligations estimated to reach $600 million to $1 billion in the coming years. The International Monetary Fund (IMF) has also warned of potential risks associated with this debt.
