Large part of dollars received will go to banks, will benefit reserve and public as well: Governor

Governor of central bank Maldives Monetary Authority Ahmed Munawwar has said that the public will also benefit from resorts and guesthouses having to exchange dollars in local banks.

Speaking in a press conference yesterday regarding the Foreign Currency Bill, Munawwar said that MMA has not so far adequately fulfilled its legal responsibility to maintain reserve at a sufficient level.

"Our reserve is highly passive now, just for the government. Instead, we are looking to work with the industry to actively increase reserve," Munawwar said, highlighting the tourism forex regulations fall under this target.

The Governor said that 40 percent of the dollars received through this would be reserved for banks' use. Munawwar said that part of what is reserved for MMA would also be issued to banks.

In addition to the public, Munawwar states that dollars needed for resorts and guesthouses will also then be available through banks. With this, the issue of black market sale of dollars in Maldives can be resolved, he believes.

"The hope is to facilitate ways for Maldivians to get dollars. Now there won't be a need to go to an informal market, dollars will be available through banks," he said.

Credit rating will improve, will benefit investors

Munawwar also addressed recent concerns that investors may hesitate to invest in the Maldives with the recent hike in tourism taxes, airport development fee and the forex regulation.

He said that the forex regulation would lead to increase in reserve, which would subsequently have a positive impact on the country's credit rating.

He highlighted how agencies such as Fitch and Moody's also highly consider reserves when rating countries.

Munawwar maintains that the increase in credit rating would lead to more investors showing interest in the Maldives.

The governor also responded to arguments presented by industry leaders against the forex regulations. He said that their main concern was having to exchange rates higher than what a guest may spend at the establishment.

He said that this would not apply to any except a few establishments and stated that the regulation, as well as the drafted bill, included exemptions for such cases.