The Maldives Monetary Authority (MMA) implemented this regulation on October 1, mandating that all foreign exchange earnings generated by the tourism sector must be deposited in local banks.
The regulation restricts most transactions to the local currency, the Maldivian rufiyaa (MVR), with only a few exceptions for specific international transactions and services.
The move follows earlier efforts by the MMA, which in August imposed a limit on dollar transactions as the country battled a dollar shortage.
The new regulation, published in the local Dhivehi language, specifies that most domestic transactions (including payments for goods, services, salaries and rent) must be made in MVR and billing in foreign currency is prohibited. Exemptions are granted for transactions related to exports, remittances, and certain legally required payments in US dollars.
Tour operators, including resorts and guesthouses, are required to exchange a minimum of $500 per tourist in MVR through authorized banks for their operations. Failure to comply with the regulation could result in fines ranging from MVR 5,000 to 1 million.
The Maldives economy has faced additional pressure due to a call for Indian tourists to boycott the country in response to President Mohamed Muizzu’s “India Out” campaign last year. Last month, the Maldives narrowly avoided defaulting on an Islamic bond thanks to a $50 million interest-free loan from India.
With the country’s debt estimated at 110% of its GDP, external debt obligations are expected to rise: Fitch Ratings estimates $557 million coming due in 2025 and $1 billion due in 2026. Moody’s Ratings offers a similar outlook . The International Monetary Fund (IMF) has also warned of a possible debt crisis.
The new regulation also requires tourism businesses to register with the central bank and deposit their foreign currency earnings into a registered local bank account within 87 days of the end of each month. This is the first time the Maldives, which attracted 1.8 million tourists last year, has implemented such strict currency controls. MMA hopes that the measure will increase the availability of foreign currency in the tourism sector.
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