Pres: USD 150M remitted to local banks so far this year under new Forex regs

President Dr. Mohamed Muizzu states USD 150 million has been remitted to local banks since January under the new foreign exchange regulations – marking a 40 percent increase from previous figures.

He made the announcement during the first episode of ‘Rayythunnaa Eku’, a podcast hosted by the President’s Office on Thursday, featuring the President.

While speaking on the podcast, the President expressed satisfaction with the widespread compliance with foreign exchange regulations, noting that approximately 95 percent of those required to remit dollars to banks are doing so, with efforts underway to ensure compliance from the remaining five percent.

“A total of USD 150 million has been remitted to banks under this law since January. This marks a 40 percent increase compare to previous remittance figures,” he said.

He highlighted the strong cooperation in dollar remittance and underscored the growing revenue from the expanding tourism sector, which continues to benefit citizens.

The President described the decision to remit dollars to banks as highly beneficial and thanked everyone involved in its implementation. He emphasized that it would contribute to national progress and benefit all citizens. Additionally, he expressed confidence that the dollar exchange rate would decrease in the future, and that government-owned companies would rely less on the black market for foreign currency purchases.

Foreign Currency Act gives tourist establishments a choice between exchanging the fixed amount per tourist as required under the regulation or exchanging 20 percent of the monthly revenue.

It categorizes tourist establishments into two types.

Category-A tourist establishments are classified as registered resorts, integrated tourist resorts and private islands. Such establishments will need to either exchange USD 500 per tourist or 20 percent of the monthly revenue.

Category-B tourist establishments are classified as registered tourist vessels, tourist hotels and tourist guesthouses. Such establishments will need to either exchange USD 25 per tourist or 20 percent of the monthly revenue.

With these measures in place, President Muizzu has expressed confidence that USD rates will drop in the future.

Notably, two most prominent international credit agencies have downgraded Maldives’ credit rating, over the concerning economic state of the island nation, particularly, its high debt burdens.

While a projected state budget of MVR 56.6 billion has been passed for this year, its deficit stands at MVR 9.4 billion.

Former President Mohamed Nasheed had claimed Maldives owed USD 150 million in repayments to external lenders as of March this year while an additional USD 25 million must be earmarked for repayment in April.  Maldives is required to pay a total of USD 800 million this year for external debts; which translates to MVR 12 to 13 billion.