The Maldives Monetary Authority (MMA) is working towards ensuring that all US dollars entering the Maldives are channelled through the domestic banking system, as the country strengthens foreign exchange management and seeks to improve liquidity across the economy.
MMA Governor Ahmed Munawar told the Parliamentary Budget Committee that currently around 65 percent of foreign currency entering the Maldives passes through the formal banking system. He said the tourism sector generates approximately USD 5.9 billion annually, while domestic banks presently capture about USD 3.8 billion, leaving a significant share of foreign currency outside the banking network.
To address this gap, recent regulatory amendments have strengthened foreign currency deposit procedures and oversight, complementing existing requirements relating to foreign currency conversion. Under the revised framework, resorts and other commercial businesses are required to operate through monitored and dedicated accounts, allowing authorities to improve transparency and ensure that foreign exchange generated within the economy is more effectively channelled through regulated financial institutions.
Munawar said the MMA intends to strengthen enforcement of these measures next year, with the objective of increasing the availability of foreign currency within the domestic financial system. Greater banking-sector liquidity is expected to support import payments, business transactions and the wider availability of foreign exchange for economic activities.
Tourism remains the Maldives’ most important foreign currency-earning industry, supported by the Government’s continued efforts to expand international air connectivity, promote the destination across key global markets and strengthen the country’s position as one of the world’s leading tourism destinations. Improving the circulation of tourism-generated foreign exchange through domestic banks is therefore expected to play an important role in supporting broader economic and financial stability.
The Governor also highlighted the importance of strengthening tax compliance within the hospitality industry. Referring to Maldives Inland Revenue Authority figures, he noted that around 50 of the country’s 185 resorts currently pay income tax, raising questions over profitability reporting and compliance across the sector.
Munawar further said that macroeconomic and fiscal challenges continue to require careful management, despite lower government expenditure planned for next year. With domestic financial institutions already providing a substantial share of government financing, he emphasised the importance of disciplined borrowing and greater consideration of external financing options to reduce pressure on domestic liquidity and support sustainable debt management.
Looking ahead, the Governor said global economic uncertainty, geopolitical tensions and international supply-chain disruptions have affected growth projections across tourism, construction, transportation and commodity-related sectors. Nevertheless, he expressed confidence that stronger flight connectivity and Government-led tourism marketing initiatives will support renewed economic growth next year, reinforcing the Maldives’ economic resilience and its position as a globally competitive tourism destination.
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