Parliament Committee Approves Penalties for Foreign Exchange Rate Violations

The People’s Majlis Finance Committee has approved amendments to the Foreign Currency Act that would make buying and selling foreign currency at rates exceeding those set by the Maldives Monetary Authority (MMA) an offence and introduce specific penalties for such violations.

The committee approved the amendment by a majority of members present after reconsidering the government-proposed bill, which had been returned to the committee for further review.

Under the government’s proposed amendments, businesses required to deposit foreign-currency earnings into a bank account would include tourism-related businesses selling goods and providing services, as well as other businesses receiving at least USD 25 million in foreign-currency-related revenue from the sale of goods and services during the preceding calendar year. The funds would have to be deposited into an account held at an MMA-licensed bank, with information on the account shared with the MMA.

The bill also requires Category A tourism establishments to convert 20 percent of their total monthly foreign-currency revenue into Maldivian rufiyaa.

The amendments approved by the committee were proposed by Funadhoo Constituency MP Mohamed Mamduh. Under the changes, foreign-currency buying and selling transactions must be conducted at rates set and published by the MMA, or at rates no higher than those rates.

Selling or attempting to sell foreign currency in violation of the prescribed rates would be made an offence. Depending on the severity of the offence, offenders could face fines ranging from MVR 25,000 to MVR 1 million.

The amendments would also prohibit advertising, promoting or disseminating information through digital or other means about foreign-currency buying and selling at rates above those set by the MMA. Those found violating this provision could be fined between MVR 25,000 and MVR 500,000.

Where a legal entity is involved in buying and selling foreign currency in violation of MMA-set rates, the approved amendments provide for a fine ranging from MVR 100,000 to MVR 5 million.

The measures form part of broader amendments to the Foreign Currency Act aimed at strengthening oversight of foreign-exchange transactions and increasing the flow of foreign currency through the formal banking system. Existing foreign-exchange rules already regulate the sector under the MMA's framework.