Dollar-starved Maldives notifies new foreign currency rules
Maldives has floated a new foreign currency regulation, limiting types of transactions allowed in foreign currency and imposing mandatory foreign currency exchange controls on tourism establishments and banks. Maldivian economy appears to have taken a hit after calls to Indian tourists to avoid the picturesque island nation as a response to President Mohamed Muizzu's 'India Out' campaign last year.
Maldives last month averted a potential default on an Islamic bond payment after India extended a USD 50 million interest-free loan.
With its forex reserves not matching its import bill, the island nation's central bank, Maldives Monetary Authority (MMA) on October 1 introduced a new regulation, requiring all foreign currency income generated by the tourism industry to be deposited in local banks.
MMA, which had in August imposed a strict dollar limit as Maldives found itself in a dollar shortage, published the new rules in the local Dhivehi language.
The Foreign Currency Regulation (Regulation No: 2024/R-91) mandates that all transactions within Maldives must be conducted in Maldivian Rufiyaa (MVR), except for those explicitly allowed in foreign currency.
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