Pres affirms no change to foreign currency regulation

President Dr. Mohamed Muizzu on Sunday evening has said that he will not withdraw the new foreign currency regulations, affirming it will stay in place.

He made the statement while speaking at the ceremony held at the Social Center, Male’ City to celebrate the current government’s first anniversary. President Muizzu took presidential helm officially on November 17, 2023.

According to the new regulation on US dollar exchange, establishments providing tourism services, and listed under Category ‘A’, must convert the currency to the bank before the 28^th day of the third month following the month of arrival, at a rate of USD 500 per tourist in the arrival month, based on the total tourist arrivals for the month.

Category ‘A’ includes tourist resorts, integrated tourist resorts, and resort hotels operating in the Maldives that are required to pay Green Tax for their tourist arrivals.

While speaking at Sunday evening’s ceremony, President Muizzu said the tourism industry posted an annual revenue of USD 4.5 billion in 2023, out of which only 1.5 percent was exchanged through the banks.

As a result, President Muizzu noted, that even the government corporations were forced to obtain US dollars through the black market which led to an increment in the dollar value in the Maldives.

Highlighting the prospects of the regulation to cooperating tourism service providers, Muizzu said the government would have the capacity to increase the current USD 500 available for purchase by locals traveling abroad to USD 1,000 by the first quarter of 2026.

Muizzu further said that dollar will be available at the official exchange rate for state-owned enterprises (SOEs) starting from July next year without resorting to the black market for exchanges.

He also said that the regulation will further enhance extending credit card limits to USD 1,400 and TT for businesses for their import operations by the first quarter in 2025. Muizzu asserted these benefits was the reason why he would not revise the regulation.

“I am stating this very clearly, we will not revise this regulation. They will have to exchange at the rate of USD 500, and compliance to this regulation is mandatory to all relevant parties.”

President Muizzu further revealed the government’s plans to introduce a new forex act aimed to provide an enforcement framework for the new exchange policies.

While the president has made these remarks, industry stakeholders have been raising concerns over the negative economic implications that would rise from it, including Champa Central Hotel that earlier closed down.

Meanwhile, President Muizzu had called for the endorsement of tourism industry pioneers in implementing the regulations, while urging these entrepreneurs not to let politicians exploit them.