In its effort to stabilize the flow of U.S. dollars in the Maldives, MMA implemented a measure requiring tourist establishments—such as resorts, guesthouses, and liveaboards—to exchange a mandatory percentage of their U.S. dollar earnings into the local banking system by the end of each month.
Hotelier Maldives
In October 2024, the Maldives Monetary Authority (MMA) introduced significant foreign exchange measures to address a persistent U.S. dollar shortage, which had been impacting the economy. This move included amendments aimed at involving the tourism sector—a major contributor to the country’s dollar inflow—on a larger scale. These measures were part of a broader strategy to enhance dollar availability within the local banking system, ensuring businesses and individuals had better access to foreign currency.
In a rule published in the Government Gazette in October 2024, the Maldives Monetary Authority (MMA) announced plans to implement a new foreign exchange regulation. In its effort to stabilize the flow of U.S. dollars in the Maldives, MMA implemented a measure requiring tourist establishments—such as resorts, guesthouses, and liveaboards—to exchange a mandatory percentage of their U.S. dollar earnings into the local banking system by the end of each month. This regulation, introduced in October 2024, categorized establishments based on their size and operational scope, setting specific thresholds for the amount of foreign currency that must be exchanged.
The primary objective of this measure was to ensure a steady and predictable flow of dollars into the domestic banking sector, enhancing dollar liquidity for businesses and individuals reliant on foreign currency for imports and other needs. By directly involving the tourism sector, which accounts for the majority of foreign exchange earnings in the Maldives, MMA aimed to address persistent dollar shortages that had placed significant strain on the economy.
With this, category A tourist establishments are to exchange USD 500, and Category B establishments are to exchange USD 25 for every tourist arrival each reporting month. According to the bill, tourist resorts, integrated resorts, private islands and resort hotels fell under Category A, and guest houses and tourist vessels fell under Category B. As such, the rule mandated both categories to complete the conversion by the 28th day of the third month following the reporting period, and exemptions from these mandatory conversion rules may be granted on a case-by-case basis by the MMA under specific circumstances.
Following the publication of MMA’s plans to introduce the new foreign exchange regulations, the proposed changes sparked significant discourse among stakeholders. Critics, particularly from parts of the tourism industry, argued that mandating resorts and other tourist establishments to exchange a set percentage of their U.S. dollar earnings could burden the industry. They contended that the policy might affect operational flexibility and increase costs, especially for smaller businesses within the sector.
Despite the concerns, the majority of registered resorts complied with the new regulation, signalling broader support for the MMA’s objectives. This compliance highlights the industry's acknowledgement of the necessity for measures to stabilize the economy and address the persistent dollar shortages.
One of the most prominent endorsements for the Maldives Monetary Authority’s (MMA) new foreign exchange regulations came from Abdulla Nasheed, CEO of Kaani Hotels and President of the National Hotels and Guesthouses Association of Maldives (NHGAM). A significant figure in the local tourism industry, Nasheed expressed his approval on X (formerly Twitter), highlighting the balanced and community-centric approach of the draft regulation.
Encouraging to see Hotels and Guesthouses in inhabited islands classified under Category B in the new Forex draft bill. A pragmatic approach that supports sustainable island community development.
This public endorsement from a key industry leader showcases growing support within the tourism sector for the MMA’s initiatives. By acknowledging the thoughtful categorization in the regulations, which took into account the unique needs of hotels and guesthouses operating on inhabited islands, Nasheed’s statement emphasized the potential for these measures to foster equitable growth and sustainable development in local communities.
The statement also reflects the alignment of interests between regulatory authorities and forward-thinking industry players who recognize the broader economic benefits of the policy. With leading stakeholders advocating for cooperation, the implementation of the new regulations gained momentum, showcasing the willingness of many within the tourism sector to contribute to the stabilization of the Maldivian economy. This endorsement not only lent credibility to the MMA’s efforts but also encouraged smaller operators and other industry participants to align with the policy objectives.
