More than 50 resorts are refusing to comply with a controversial new foreign currency regulation, sending formal objections to the Maldives Monetary Authority (MMA) and protesting the rule, which mandates the deposit of foreign currency earnings into Maldivian banks.
The rule, introduced on 1 October and marking the end of a 37-year-old foreign exchange policy, mandates that all transactions in the Maldives be conducted in Maldivian Rufiyaa (MVR), with exceptions for specific tourism and foreign currency sectors. It requires “A” category tourist establishments, such as resorts, to exchange at least $500 per guest, while “B” category guesthouses must exchange $25 per tourist monthly. Resorts had until 30 October to register with the MMA under this regulation.
Prior to the implementation of the rule, the MMA held a meeting with industry representatives, during which both the authority and the tourism sector proposed formulas for dollar exchange. However, sources report that the tourism industry’s suggestions were not accepted, with the final regulation differing significantly from what had been discussed.
The Maldives Association of Tourism Industry (MATI) voiced disappointment in a statement shortly after the rule was announced, criticising the lack of consultation. MATI argued that the rule would disproportionately burden smaller tourism businesses, such as guesthouses, which increasingly receive payments in local currency.
Prominent tourism leader Mohamed Moosa, chairman of Crown & Champa Resorts, formally protested in a letter addressed to MMA Governor Ahmed Munawwar, calling the regulation “arbitrary” and “unfeasible.” Moosa, whose career has heavily influenced the Maldives’ tourism sector, warned of the regulation’s “disastrous domino effects” on the economy. His letter urged the government to suspend the regulation, citing concerns over potential investor flight, the one-size-fits-all approach to foreign currency requirements, and the lack of provisions for resorts with high debt burdens.
Following Moosa’s letter, it has now emerged that over 50 resorts have independently protested the rule in letters to the MMA, declaring their refusal to comply. A senior official from the tourism industry, which is dominated by powerful business figures often compared to oligarchs, described the regulation as detached from the economic realities facing Maldivian tourism.
“The rule does not meet the realities of the industry and the economic situation in the Maldives,” the official said.
The government has yet to publicly address the growing protest against the foreign currency rule.