President Muizzu ratifies Foreign Currency Bill

President Dr Mohamed Muizzu ratified the Foreign Currency Bill, which was passed in the parliament on December 12.

The bill aims to set clear regulations for managing foreign currency transactions in Maldives and standardize currency exchange practices.

It mandates that all domestic transactions must be conducted exclusively in Maldivian Rufiyaa, with exceptions permitted only under specific conditions outlined in the law.

Additionally, the bill prohibits charging Maldivian nationals for any services provided or acquired within the country in currencies other than Rufiyaa.

The bill establishes a framework for businesses operating under the law to manage foreign currency obtained from sales proceeds. Under this framework, businesses are required to exchange their foreign currency with banks operating in Maldives.

These banks, in turn, must sell a specified percentage of the exchanged currency to Maldives Monetary Authority (MMA).

Establishments under Category A, such as resorts, integrated tourist resorts, private island resorts, and resort hotels are required to exchange either USD 500 per tourist per month or 20 percent of their gross monthly sales with banks.

For Category B, which includes tourist hotels, guest houses, and vessels, businesses must exchange USD 25 per tourist per month or 20 percent of their gross monthly sales with banks.

Category C applies to businesses outside the tourism sector but with annual sales or purchase transactions exceeding USD 15 million in foreign currency. These businesses are required to exchange 20 percent of their gross sales with banks.

Additionally, the Act stipulates that businesses in the tourism sector and those exceeding the USD 15 million threshold in foreign currency transactions must register with MMA and transfer foreign currency proceeds to a local bank.

MMA will oversee the implementation of the Act and drafting regulations to support its enforcement.

These regulations must be finalized within two months of the Act’s ratification. Published in the Gazette, the Act is set to come into effect on January 1, 2025.