By The longstanding dollar crisis in the Maldives is showing signs of easing as the government’s foreign exchange reforms take effect, with over $25 million converted into banks in just one month, President Dr. Mohamed Muizzu has revealed.
For years, the Maldivian public has struggled with a severe dollar shortage, forcing many to rely on the black market at exorbitant rates. The current administration, which came into power with a pledge to resolve this crisis, has made significant strides within a short period.
In collaboration with the Maldives Monetary Authority (MMA), the government has undertaken major policy reforms, including amendments to the country’s 37-year-old foreign exchange regulations. These changes mandate tourism businesses to convert a portion of their earnings through local banks, a move aimed at curbing black market activity and strengthening the banking system.
Under the new MMA regulations, resorts are now required to convert either $500 per tourist or 20% of their foreign currency earnings, while guesthouses must convert $25 per tourist.
President Muizzu lauded the cooperation of resort operators, stating that almost all have complied with the new regulations.
“Since last October, resorts have been converting dollars into banks. According to the MMA Governor’s latest update, over $25 million has been converted in just one month,” the President said.
The government expects at least $40 million to enter the banking system in the first month as full compliance is achieved.
Greater Public Benefits Expected
The primary beneficiaries of these reforms are Maldivian citizens, as the increased dollar availability will ease restrictions on foreign transactions. The government has announced plans to:
- Double the foreign travel allowance from $500 to $1,000
- Increase bank card limits for foreign transactions
- Expand dollar access for students studying abroad
President Muizzu has assured that the new laws will be fully enforced, with no exemptions.
“If this continues successfully, we will fully implement the law. No business required to convert dollars will be exempt—whether a resort or any other entity, compliance is mandatory,” the President emphasized.
The government remains confident that as these reforms are fully enforced, the country’s dollar crisis will gradually ease, ensuring greater financial stability and economic security for the Maldivian people.