Tourism Sector Remits USD 150 Million to Maldivian Banks: President Muizzu

Tourism facilities in the Maldives have exchanged $150 million into Maldivian banks so far this year, a 40 percent increase compared to previous figures, President Mohamed Muizzu revealed. Speaking in the Rayyithunna Eku podcast launched by the President's Office, Muizzu emphasized that the rise in foreign exchange transactions marks a significant step toward economic stability.

The President noted that 95 percent of tourism establishments required to exchange their foreign currency earnings under the Foreign Exchange Act are complying with the mandate. He expressed optimism that the remaining five percent would soon follow suit, stating that the government is actively engaging with them. The cooperation from all parties has been excellent. This will enable the tourism sector to grow and help us achieve our economic targets, he said.

The Maldives Monetary Authority (MMA) initially required tourism service providers to exchange dollars through regulatory measures. However, a legal framework was later enacted, strengthening the policy. Under the Foreign Exchange Act, since last month, Category A resorts have been given the option to exchange $500 per tourist or 20 percent of their total monthly revenue. Similarly, guesthouses under Category B are required to exchange either $25 per tourist or 20 percent of their monthly income.

The increase in dollar exchanges has also bolstered the country's foreign exchange reserves. According to the latest data from the MMA, usable reserves currently stand at $179 million, while official reserves amount to $832 million. The President highlighted that this trend would facilitate an increase in credit card limits and sustain the $1,000 allowance for Maldivians traveling abroad.

President Muizzu further stated that the ongoing foreign exchange reforms would significantly reduce reliance on the parallel market for dollars. Currently, many state-owned enterprises (SOEs) are compelled to acquire dollars from parallel markets due to shortages. However, the President assured that by mid-year, SOEs would no longer need to resort to such measures. By the middle of this year, SOEs will not buy dollars from the parallel market at all. That will also cause a huge fall in the dollar, he asserted.

The government’s efforts to regulate and strengthen foreign exchange flows are expected to contribute to the long-term stability of the Maldivian economy, particularly in the tourism sector, which remains the primary driver of the nation's revenue.