The Maldives Monetary Authority (MMA) is working towards a long-term transformation of the country’s financial system that would significantly expand the use of the Maldivian Rufiyaa in domestic transactions by 2030, as the government and central bank pursue wider reforms aimed at strengthening monetary stability, improving foreign exchange management and reinforcing confidence in the national currency.
MMA Governor Ahmed Munawar outlined the vision during a press conference held at the President’s Office, noting that a substantial proportion of financial activity in the Maldives continues to be conducted in US dollars. He said the central bank’s long-term objective is to gradually establish the Maldivian Rufiyaa as the principal currency used for transactions within the domestic economy, building on efforts undertaken by successive MMA leaderships to strengthen the role of the local currency.
According to Munawar, foreign currency currently represents more than 40 percent of financial transactions conducted in the Maldives. He highlighted salary payments in dollar-earning industries, particularly the tourism sector, as one of the areas where greater use of the Rufiyaa could contribute to increasing domestic demand for the national currency.
The resort industry, which remains one of the Maldives’ most important sources of foreign currency earnings and a major contributor to national economic activity, is expected to play a central role in the gradual transition. Munawar noted that salaries at resorts and companies such as Trans Maldivian Airways are currently paid in US dollars in certain cases, and said practices of this nature would eventually need to evolve if the country is to generate stronger and more sustainable demand for the Maldivian Rufiyaa.
The proposed direction is particularly significant for the Maldives’ tourism economy, where resorts generate substantial foreign exchange through international visitor spending while simultaneously supporting employment, government revenue, local businesses and a broad network of domestic suppliers and service providers. Increasing the circulation of Rufiyaa within this economic ecosystem could strengthen linkages between tourism-generated foreign currency income and the wider domestic economy.
The Governor also identified foreign currency payments to the government, including tourism land rent paid by resort businesses, as another area where reforms could be considered as part of the broader strategy. Any transition is expected to be implemented alongside wider measures designed to strengthen economic fundamentals and ensure that changes to currency arrangements are supported by sufficient financial stability.
Munawar stressed that achieving the 2030 objective would require comprehensive macroeconomic reforms, including greater stability in government budget policy. He said the long-term vision is for the Maldives to operate under a framework resembling a managed floating exchange rate system, while emphasising that the MMA would need to maintain adequate foreign currency reserves before such a framework could be sustainably implemented.
The central bank is also preparing to propose additional amendments to the Foreign Exchange Act as part of efforts to improve the flow of foreign currency through the formal financial system. Among the measures under consideration is an increase in the mandatory foreign currency conversion requirement applicable to resorts from 20 percent to 40 percent.
Munawar also said the MMA intends to propose changing the frequency at which required foreign currency conversions are carried out. Under the planned reforms, conversions could be required on a monthly basis instead of once every three months. The central bank additionally intends to establish mechanisms that would provide greater visibility into how foreign currency earnings are utilised across the economy.
The proposals follow amendments recently submitted by the government to revise the existing foreign exchange framework. Under the proposed changes, the current requirement for resorts to exchange USD 500 for each tourist would be replaced with a requirement to convert 20 percent of resort revenue into the domestic banking system.
The revenue-based mechanism represents an important adjustment for the resort industry, aligning foreign currency conversion obligations more directly with the financial performance and income generated by individual tourism establishments. Given the diversity of the Maldives’ tourism sector, which includes resorts of varying sizes, market segments, occupancy levels and revenue profiles, linking conversion requirements to revenue provides a framework that reflects actual business activity rather than relying solely on visitor numbers.
The proposed amendments also seek to ease foreign currency exchange requirements for businesses that are entirely Maldivian-owned, with tourism businesses and financial institutions excluded from that provision. Greater flexibility is also proposed for entities that encounter difficulties in meeting legally prescribed foreign currency conversion amounts or deadlines.
Another proposed revision concerns the threshold for businesses required to deposit their foreign currency earnings into bank accounts. Under the amendment, the obligation would apply to tourism businesses as well as other entities whose foreign currency sales reached at least USD 25 million during the previous calendar year. The existing framework applies the requirement to entities earning at least USD 15 million in foreign currency revenue.
The reforms form part of broader efforts by the administration and the MMA to strengthen the country’s foreign exchange framework while ensuring that the Maldives’ internationally connected tourism economy continues to support domestic financial stability. By increasing the role of the Maldivian Rufiyaa, strengthening foreign currency circulation through the banking system and improving reserve management, the authorities are seeking to establish a more resilient monetary environment capable of supporting sustainable economic growth over the coming years.
For the resort sector, the evolving framework is expected to strengthen its already significant role in supporting the national economy beyond visitor arrivals and tourism receipts. As one of the country’s principal generators of foreign currency, the industry will remain integral to efforts to strengthen reserves, deepen domestic currency usage and ensure that the economic benefits generated by Maldives tourism circulate more effectively throughout the wider economy.
The government’s ongoing foreign exchange reforms, together with the MMA’s 2030 vision, therefore represent a wider effort to balance the needs of businesses, tourism operators and consumers while building a stronger financial foundation for the Maldives. With careful implementation, adequate reserves and continued fiscal reforms, the initiative is expected to support greater monetary stability while preserving the competitiveness and continued growth of the country’s globally renowned tourism industry.
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