Thursday
19th Dec 2024
Dhivehi Edition
President Dr.Muizzu
President Muizzu Ratifies Foreign Currency Act to Strengthen Currency Regulations
President Muizzu, Photo: President's Office
President Dr. Mohamed Muizzu ratified the Foreign Currency Act today, following its passage during the 60th sitting of the third parliamentary session on December 12, 2024. The Act, set to come into force on January 1, 2025, establishes a comprehensive framework for managing foreign currency transactions and regulating exchange practices within the Maldives.
The legislation mandates that all domestic transactions be conducted in Maldivian Rufiyaa, barring specific exceptions outlined in the law. It also prohibits charging Maldivian nationals for services provided within the country in any currency other than the Rufiyaa.
Key provisions of the Act include a structured mechanism for businesses to exchange foreign currency derived from sales proceeds. Businesses operating under Maldivian law must exchange foreign currency with local banks, which are required to sell a defined percentage of these exchanges to the Maldives Monetary Authority (MMA). Based on their operations and revenue, businesses are classified into three categories with specific exchange requirements:
Category A: Resorts, integrated tourist resorts, private island resorts, and similar establishments must exchange either $500 per tourist per month or 20% of their gross monthly sales with banks.
Category B: Tourist hotels, guesthouses, and vessels are required to exchange $25 per tourist per month or 20% of their gross monthly sales.
Category C: Businesses not covered under Categories A or B but with annual foreign currency transactions exceeding $15 million must exchange 20% of their gross sales with banks.
Additionally, businesses in the tourism sector or those surpassing the $15 million annual foreign currency transaction threshold are required to register with the MMA and transfer their realised foreign currency proceeds to local banks.
The MMA will oversee the enforcement of the Act and is tasked with formulating regulations within two months of its implementation. The Act’s provisions will repeal specific sections of the existing Foreign Currency Regulation (2024/R-91) and the Maldives Monetary Act (Law no. 6/81), except where exemptions apply under sections 22(a) and (b).
The Foreign Currency Act has been published in the Government Gazette and marks a significant step towards ensuring a regulated and transparent system for currency management in the Maldives.