The Maldives Monetary Authority (MMA) has reminded businesses across the country to comply with mandatory foreign currency conversion requirements as the first deadline under the newly shortened conversion timetable approaches, reinforcing the Government’s broader efforts to strengthen foreign exchange circulation and support greater stability within the domestic financial system.
In a statement issued on 26 October, the central bank said parties covered under Article 10 of the Foreign Currency Act are required to convert the prescribed portion of their monthly foreign currency earnings into Maldivian rufiyaa before the 28th of the following month. MMA also noted that the names of businesses that fail to meet their conversion obligations may be published in accordance with the authority’s established policy.
The latest reminder is particularly significant for businesses preparing to complete the conversion of foreign currency earnings generated during September. Following amendments that came into effect on 1 September, the deadline for converting September earnings is 28 October. The revised timeline replaces the previous arrangement, under which businesses were permitted to complete the required conversion by the 28th of the third subsequent month.
The updated framework introduces clearer conversion requirements across the tourism sector, one of the country’s largest sources of foreign currency revenue. Category A tourism establishments, including the Maldives’ internationally renowned resort properties, are required to convert 40 per cent of their monthly gross foreign currency sales into Maldivian rufiyaa through a licensed bank. The amendments have also removed the previous alternative that allowed resorts to convert USD 500 per tourist.
The requirement is expected to increase the formal flow of foreign currency through the domestic banking system while maintaining a transparent framework for tourism businesses operating across the country. Maldives resorts remain central to the national economy, attracting travellers from major international markets and supporting a wide network of local businesses, employees, transport operators, suppliers and service providers. With the sector continuing to generate substantial foreign currency earnings, the revised conversion framework places greater emphasis on ensuring that a defined share of those revenues contributes directly to liquidity within the Maldivian financial system.
Category B establishments, including tourist hotels, guesthouses and tourist vessels, continue to have greater flexibility. These businesses may either convert USD 25 for each eligible tourist arrival or convert 20 per cent of their monthly gross foreign currency sales. Certain visitors are excluded when calculating the eligible tourist count, including children below the age of 12 and tourists whose stays do not exceed 24 hours.
The regulations also allow businesses to deduct specific statutory obligations when calculating the gross foreign currency sales subject to conversion. These include Tourism Goods and Services Tax, green tax and service charge obligations applicable for the relevant month, providing businesses with a more defined basis for calculating the amount required to be converted.
Foreign currency conversion obligations are not limited to the tourism industry. Businesses outside the financial sector that earned at least USD 25 million, or its equivalent, in foreign currency from the sale of goods and services during the preceding calendar year are also covered by the framework. Such qualifying businesses are generally required to convert 40 per cent of their monthly gross foreign currency sales, while wholly Maldivian-owned businesses falling within the applicable provisions are subject to a seven per cent conversion requirement.
MMA has further clarified that depositing foreign currency earnings into a foreign currency bank account and converting the prescribed amount into Maldivian rufiyaa are two separate legal obligations. Businesses therefore cannot fulfil the conversion requirement merely by depositing their foreign currency earnings into an account and must separately complete the required conversion through the banking system.
The revised framework forms part of continued efforts to improve the availability of foreign currency within the domestic market, enhance transparency in foreign exchange transactions and strengthen the effectiveness of the formal banking system. With tourism remaining the backbone of the Maldivian economy, stronger circulation of foreign currency through licensed financial institutions is expected to contribute to greater predictability for businesses, importers and consumers while supporting the Government’s wider economic and financial management objectives.
MMA’s latest statement did not identify any businesses currently in breach of the requirements or indicate a specific date on which the names of non-compliant parties would be published. Businesses subject to the Foreign Currency Act have nevertheless been urged to ensure that the applicable conversion requirements are completed within the prescribed deadlines.
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