The central bank, MMA, has decided to increase the amount of dollars issued to banks each week by 51 percent for the next three weeks.

MMA, stated that this was done to further facilitate the acquisition of foreign currency through the banking system and that it will provide additional relief to the foreign exchange market. MMA increased the amount of dollars released to banks by 51 percent for the upcoming three weeks.

Last year, MMA sold USD 1.1 billion for the needs of commercial banks and state-owned enterprises. Out of this, the allocation set for banks was USD 264 million. That is approximately USD 5 million per week.

With the increase in the amount of dollars issued to banks, it is expected that approximately USD 7 million per week will be released to commercial banks over the next three weeks.

MMA said that due to this change, it will further pave the way for obtaining foreign currency through the banking system and address the difficulties faced by businesses in securing the necessary funds to import goods.

Following a drop in the inflow of dollars to the Maldives since last February, the MMA has been taking various measures to reduce the pressures facing the foreign exchange market.

The availability of dollars has declined due to a decrease in tourist arrivals caused by the ongoing conflicts in the Middle East. Due to the war in the Middle East, the tourism sector has been impacted, and revenues of many businesses have dropped significantly.

Previously as well, MMA has undertaken significant efforts to resolve foreign currency shortages. In this regard, ahead of this year's Ramadan, to assist merchants importing essential food items and to maintain stable prices, the amount of dollars issued to banks was increased by 32 percent. To provide additional assistance to businesses during the tourism off-season, the weekly dollar allocation was also increased by 26 percent last June.

While the amount of dollars issued to banks has been increased, the MMA has also decided to bring changes to the Foreign Exchange Act. Accordingly, the requirement for Category A resorts to exchange USD 500 per tourist head has been abolished, and it has been decided to change it so that they only need to exchange 20 percent of their revenue. With this, the MMA estimates that the amount of dollars exchanged at banks will increase.