President Dr Mohamed Muizzu has said the Government’s measures to effectively address the Maldives’ foreign currency challenges are based on extensive research, technical assessments and consultations, with the policies expected to deliver positive changes to the economy and strengthen the country’s financial system over the longer term.
Speaking on PSM’s Nation Chat Programme, President Muizzu addressed concerns surrounding the availability of US dollars and explained that the Administration is pursuing a broader programme to strengthen the national economy. This includes formulating policies specifically aimed at addressing foreign exchange challenges while ensuring the effective implementation of existing laws and regulations that had not previously been fully enforced.
The President said the Government’s approach is focused on establishing a stronger and more sustainable economic framework rather than adopting measures that could restrict commercial activity or discourage economic growth. While acknowledging that some of the policies have attracted criticism, President Muizzu noted that certain political figures may oppose the measures for political reasons, while the wider public understands the necessity of addressing longstanding economic and foreign currency challenges.
President Muizzu said the public recognises that decisive measures are required to improve the country’s economic position and resolve pressures within the foreign exchange market. He assured businesses, investors and the wider public that the Government would not introduce policies that undermine economic growth, adding that the measures being implemented are expected to produce positive outcomes for the country.
According to the President, the Government’s foreign exchange policies have been developed on the basis of facts and evidence, following extensive technical evaluations, research and consultations. The Administration’s emphasis on evidence-based policymaking reflects its broader objective of strengthening economic resilience, improving financial stability and creating a more predictable environment for businesses operating across key sectors of the Maldivian economy.
Alongside the Government’s policy measures, the Maldives Monetary Authority (MMA) is working to further strengthen the domestic banking sector and increase the number of banks operating within the country. Expanding and strengthening the banking industry is expected to enhance financial sector competitiveness, improve access to banking services and support the circulation of a greater proportion of the country’s foreign exchange earnings through the formal Maldivian banking system.
A key focus of the ongoing reforms is increasing the volume of foreign currency generated by the Maldivian economy that circulates through domestic banks. This is particularly important for the Maldives, where tourism remains the principal source of foreign exchange earnings and resorts, guesthouses and other tourism-related businesses generate substantial revenue in international currencies.
As part of the reforms, amendments are being pursued to the Foreign Exchange Act requiring businesses earning income in foreign currency, including tourist resorts and guesthouses, to deposit 40 percent of their monthly foreign exchange earnings with local banks. The measure is intended to increase foreign currency availability within the domestic banking system and improve access to foreign exchange for businesses and individuals through regulated financial channels.
The resort sector remains central to the success of the Maldives’ foreign exchange framework, given its significant contribution to national revenue, employment, investment and foreign currency inflows. By ensuring that a larger proportion of tourism-generated foreign exchange passes through domestic financial institutions, the Government expects to strengthen liquidity within the banking system while supporting a more stable and transparent foreign exchange market.
The Government’s wider economic strategy continues to focus on strengthening the country’s financial foundations while maintaining an environment that supports tourism development, private-sector activity and investment. President Muizzu reiterated that the measures being introduced have been carefully evaluated and are designed to address existing economic challenges without compromising future growth, with the Administration confident that the reforms will contribute positively to the Maldives’ long-term economic stability and prosperity.
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