Resorts to be required to exchange 20% of revenue instead of USD 500 per tourist

The Maldives Monetary Authority (MMA) has submitted amendments to the Foreign Currency Act, seeking to drop the option for resorts to exchange USD 500 per tourist and require the facilities to exchange 20 percent of the monthly revenue.

MMA announced on Tuesday that it has sent the amendments to the Attorney General’s Office, and expect it to be submitted to the Parliament soon.

The Foreign Currency Act that took effect in 2025 requires resorts to exchange USD 500 per tourist or 20 percent of the monthly revenue in US dollars to a Maldivian bank.

The law categorizes tourist establishments into two types.

Category-A tourist establishments are classified as registered resorts, integrated tourist resorts and private islands. Such establishments will need to either exchange USD 500 per tourist or 20 percent of the monthly revenue.

Meanwhile, Category-B tourist establishments are classified as registered tourist vessels, tourist hotels and tourist guesthouses. Such establishments will need to either exchange USD 25 per tourist or 20 percent of the monthly revenue.

However, tourist establishments will not be required to exchange USD for tourists who spend less than 24 hours at the establishment, tourists under the age of 10 years - higher than the originally proposed two years, tourists hosted by establishments on a complimentary basis, and tourists hosted by the government.

The MMA has decided to drop the USD 500 option, requiring resorts to exchange 20 percent of the monthly revenue.

A spokesperson from MMA said the amendment is being brought to promote equity as different classes of resorts sell rooms at different rates.

He explained that the USD 500 option allows high-class resorts that sell rooms for thousands of dollars to exchange a proportionately lower percentage of their revenue than smaller resorts that charge lower room rates.

MMA described the change as a significant move that will boost US dollars in the country’s banking system, estimating that it will increase the USD going into banks by around USD 100 million per annum.

However, the central bank has no immediate plans to amend the USD exchange requirement for liveaboard vessels, guesthouses and hotels, meaning that such facilities will continue to have the option of exchanging either USD 25 per head or 20 percent of revenue.

The proposed amendments also offer greater concessions to ‘Category C’ establishments – non-tourism businesses that earn revenue in US dollars, raising the revenue threshold from the current USD 15 million in annual USD revenue to USD 20 million.

With the change, non-tourism businesses that generate USD will only be required to exchange dollars if the annual USD revenue is higher than USD 20 million.

The proposed changes come as the USD exchange rate in the black market rose to a record high of MVR 22 this week.

Demand for dollars from the black market has skyrocketed due to the scarcity of foreign currency within the formal banking system for imports, coupled with the foreign currency required to meet Maldives’ staggering external debt obligations.

The rising value of the dollar poses huge challenges for importers, driving up prices of goods in the Maldivian market.