The Maldives Monetary Authority (MMA) has identified Rahaa Resort and South Palm Resort Maldives as two tourism establishments that completely failed to exchange foreign currency in accordance with requirements introduced under the Foreign Exchange Act, as authorities continue efforts to strengthen the country’s formal foreign exchange system and improve the availability of US dollars within the domestic economy.
The disclosure forms part of the Government’s broader effort to improve transparency, strengthen regulatory compliance and ensure that foreign currency generated by the country’s major economic sectors is channelled more effectively through the official financial system. The tourism industry, particularly the resort sector, represents a central pillar of the Maldivian economy and generates a substantial share of the country’s foreign currency earnings through international visitor expenditure.
Resorts play an especially important role within this framework because a significant proportion of their business activities and revenues are connected to overseas markets and international travellers. The foreign exchange requirements are therefore intended to ensure that part of the foreign currency generated within the tourism industry becomes available through the regulated banking system, supporting businesses, households and essential national expenditure.
According to the MMA, 78 percent of resorts classified under Category A fully complied with the applicable dollar exchange requirements. A further 20 percent did not exchange the full amount required under the regulations. The remaining proportion includes establishments that did not exchange any foreign currency, with Rahaa Resort and South Palm Resort Maldives publicly identified by the central bank as having completely failed to fulfil the exchange requirement.
The high level of full compliance recorded among Category A resorts indicates that a considerable majority of the resort industry has adapted to the foreign exchange framework. This is particularly significant given the scale and importance of resort operations to the national economy and their contribution to employment, investment, government revenue, foreign exchange generation and the wider tourism supply chain.
The MMA said several resorts had approached the authority requesting concessions based on their individual circumstances. While acknowledging that businesses may face different operational and financial considerations, the central bank stressed that entities covered by the law remain legally required to comply with their obligations.
The authority has also urged all businesses falling within the scope of the Foreign Exchange Act to complete the necessary regulatory requirements. Eligible businesses that have not yet registered with the MMA will be provided with a final opportunity to register, reflecting the authorities’ continued emphasis on encouraging compliance while allowing businesses an opportunity to regularise their status.
Compliance levels were comparatively lower among Category B businesses, which include guesthouses, tourist hotels, safari vessels and homestays. The MMA reported that 48 percent of businesses in this category fully complied with the foreign currency exchange requirements, while 15 percent exchanged foreign currency but did not meet the full required amount. A further 37 percent did not exchange any foreign currency.
Recognising that many establishments within Category B are medium-sized tourism businesses with different operational capacities compared with large resort properties, the MMA said additional legal flexibility is being provided to assist these operators. The authority is also conducting awareness programmes to improve understanding of the regulatory requirements and help businesses fulfil their obligations.
The approach reflects efforts by the Government and financial authorities to balance effective implementation of the foreign exchange framework with the practical circumstances facing smaller tourism operators. Guesthouses, hotels, safari vessels and other locally operated tourism businesses have become an increasingly important part of the Maldives’ tourism economy, expanding tourism activity across inhabited islands and creating economic opportunities for communities beyond major resort properties.
The MMA also provided compliance figures for Category C businesses, comprising companies with annual revenues exceeding USD 15 million. In this category, 38 percent fully complied with the foreign exchange requirements, while 33 percent were partially compliant and 29 percent did not exchange any foreign currency.
Businesses classified under Category C have also requested concessions in relation to the requirements. The MMA said amendments to the Foreign Exchange Act have been submitted to address circumstances affecting businesses within this category, demonstrating an ongoing effort to refine the regulatory framework while maintaining the wider objectives of foreign exchange reform.
The foreign exchange framework has been introduced as part of wider efforts to increase the circulation of foreign currency through official channels and strengthen access to dollars within the Maldivian financial system. Ensuring a predictable flow of foreign currency is particularly important for an island economy that depends heavily on imports for essential commodities, energy, healthcare supplies and many other goods required by households and businesses.
The MMA also explained how foreign currency exchanged under the system is subsequently allocated. According to the central bank, 90 percent of the foreign currency exchanged under the legal framework is retained by the MMA. From this amount, 30 percent is redistributed to commercial banks operating in the Maldives, with priority given to Maldivian banks.
Commercial banks receiving foreign currency through this mechanism are required to allocate the funds towards essential public requirements, food imports and financing for small and medium enterprises. This arrangement is intended to improve access to foreign currency for economically important activities while strengthening the ability of domestic businesses to obtain the financing and foreign exchange required for their operations.
The majority of the foreign currency retained by the MMA is used for payments associated with essential imports, including fuel, gas and medicine. A portion is also directed towards supporting the Maldives’ foreign currency reserves, which are important for maintaining external financial stability and meeting the country’s international payment obligations.
The strengthened foreign exchange framework forms part of the Government’s wider economic management efforts aimed at improving foreign currency availability, supporting essential imports and reinforcing financial stability. With the resort sector continuing to serve as one of the country’s most important sources of foreign currency, sustained compliance by tourism establishments is expected to contribute significantly to the effectiveness of the system and to the broader resilience of the Maldivian economy.
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