The Maldives Monetary Authority (MMA) on Tuesday gazetted new regulations requiring tourism establishments to exchange foreign currency at fixed amounts per tourist, as part of the country’s efforts to boost foreign exchange inflows and tackle the ongoing dollar shortage.

The changes mark the end of a 37-year-old foreign exchange rule, in place since March 1987, with the new regulations mandating that all transactions in the Maldives be conducted in Maldivian Rufiyaa (MVR). However, exceptions have been made for businesses dealing in foreign currency, including payments to the government, customer-to-customer transactions through banks, and remittance service providers. Insurance companies and businesses linked to tourism, such as resorts and duty-free shops, are also allowed to conduct transactions in US dollars. International transactions, foreign currency payments for goods and services, and dividend payments by foreign-currency earning businesses are also similarly permitted.

Tourism businesses are required to register with the MMA within 30 days to report their foreign exchange earnings. Newly registered businesses must also submit the relevant information to the MMA within 30 days of their registration with the Maldives Inland Revenue Authority (MIRA). The regulation further obliges businesses to deposit foreign earnings into Maldivian banks within three months and to report the details of goods and services provided.

A fixed exchange amount requirement mandates that guests staying at resorts, city hotels, and safari boats classified under category ‘A’ must exchange at least US$500 per head, while guesthouses and smaller hotels classified under category ‘B’ must exchange a minimum of US$25 per tourist for each month. Exceptions can be made when foreign currency is needed for taxes, loan repayments, or by court order, by applying to the central bank.

Banks must exchange 60 per cent of their weekly foreign currency receipts via the MMA and submit details of all foreign exchange transactions. Non-compliance will result in fines ranging from MVR 10,000 to MVR 1 million, with additional penalties of up to MVR 5,000 per day for unresolved violations.

Despite the new rules, businesses and individuals are still allowed to carry and hold foreign currency within the country.