Shahid: Govt. should consider concerns surrounding USD regulation

Main opposition MDP’s leader Abdulla Shahid has called on the government to consider concerns raised by various parties on the Regulation on Foreign Currency and the Regulation on Money Changing Business. 

On Tuesday, the MMA published two new regulations aimed at increasing the flow of US Dollars in the Maldives. Subsequently, Maldives Association of Tourism Industry (MATI), comprising of the pioneers of the Maldivian tourism industry, said the regulations were formulated without addressing any of the concerns raised by the association.

Shahid, via a post on X, expressed concern citing that the new regulations were formulated without prior discussions with stakeholders. As the regulations stand to directly impact businesses in the tourism industry, Shahid underscored the importance of seeking the opinion of resorts, guesthouses and liveaboards and addressing their concerns.

“Measures taken to resolve an issue that instead adversely impacts the largest industry can cause further harm to the whole economy,” he stressed.

MMA’s new regulations require all tourism revenues to be deposited in the Maldives and impose a mandatory surrender of USD for each tourist.

In this regard, Category A’ tourist establishments - tourist resorts, integrated tourist resorts and resort hotels – to exchange USD from a local bank at the rate of USD 500 per tourist for all monthly arrivals before the 28th day of the third month following each respective month.

Meanwhile, ‘Category B’ tourist establishments – tourist guesthouses and hotels in residential islands with registered rooms of 50 or under - must exchange USD in the same manner, but at the rate of USD 25 per tourist.

MMA states the regulations will increase the rate of foreign currency entering the Maldivian banking system which would pave the way to increase rate of foreign currency supplied to local businesses and the general public within the banking system.

Despite the increase of USD entering the Maldivian banking system being a huge benefit, many have expressed concern over the new regulations citing resorts and guesthouses would face losses when they are mandated to exchange USD for each tourist.

MDP’s Chairperson Fayyaz Ismail also commented on the matter earlier, underscoring changes by the government to address the foreign exchange while commendable and will relieve some pressure - had been implemented in a problematic manner.