The Maldives Monetary Authority (MMA) has introduced new regulations requiring tourism businesses to deposit their earnings into Maldivian banks to boost the circulation of foreign exchange in the country's banking system. These rules replace the Foreign Exchange Rule and the Money Exchange Rule that have been in place for 37 years.
The primary goal of the new regulations is to enhance the inflow of foreign currency into the banking system and increase the amount available to businesses and the public. Additionally, the MMA intends to boost the foreign exchange sold in the market to support its exchange rate policy.
Under the new Foreign Exchange Rules, tourism businesses are required to deposit foreign earnings into the banking system and must register with the MMA within a month of the rules taking effect. Providers of tourism services must report their service details to the MMA by the 28th of the following month, with deposits made to authorized banks within three months.
Tourism service providers are categorized into two groups for foreign currency deposits. Category A, which includes resorts, large hotels, and tourist vessels, requires a deposit of USD 500 per tourist. Category B, covering guesthouses and smaller hotels, mandates a USD 25 deposit per tourist. Those unable to meet these amounts can apply for permission to deposit a lesser amount.
The MMA has specified that 60% of foreign exchange entering the banking system must be sold to the MMA weekly, establishing a system to ensure banks can continuously meet foreign exchange demand. This is expected to alleviate the challenges banks currently face in accessing foreign currency.
Additionally, significant changes have been made to the foreign exchange and money changer regulations. New licensing requirements for currency exchange businesses include a security deposit of USD 50,000, and only Maldivians will be permitted to operate in this sector.