Maldives Monetary Authority (MMA) has announced an increase in the proportion of foreign exchange that banks must sell to the central bank, raising it from 60 percent to 90 percent to strengthen the availability of US dollars for local businesses.

Under the Foreign Currency Act, businesses in the tourism sector are required to deposit a portion of their foreign currency earnings with local banks.

Previously, banks were mandated to sell 60 percent of these foreign currency deposits to MMA. However, starting next month, this will increase to 90 percent, significantly boosting the central bank’s access to foreign exchange.

In a statement, MMA said that this measure is intended to facilitate a sustainable weekly supply of foreign exchange to businesses through banks.

The Foreign Currency Act also requires varying deposit amounts from different segments of the tourism sector, depending on the nature of their operations.

Under the Foreign Exchange Act, since January, Category A resorts have been given the option of exchanging USD 500 per tourist or 20 percent of their total revenue each month.

Under "Category B," guest houses are required to exchange USD 25 per tourist, or 20 percent of their monthly income.

According to President Dr. Mohamed Muizzu, the amount of USD exchanged under the law has reached USD 150 million as of March's end.

MMA to take 90 percent of dollars exchanged via banks