President Muizzu Ratifies New Foreign Currency Law to Strengthen MMA Market Control

President Dr Mohamed Muizzu has ratified an amendment to the Foreign Currency Act, granting the Maldives Monetary Authority (MMA) expanded oversight of exchange rates and introducing stricter conversion mandates for businesses. The legislation, passed by Parliament on August 26, aims to stabilize the national currency and regulate the flow of foreign exchange within the economy. Under the new law, the MMA will now dictate the rates or bands within which foreign currency may be traded. To ensure compliance, all foreign exchange businesses are now required to operate under a formal license issued by the authority. Those who bypass these regulations face severe penalties; selling or advertising currency above MMA-set rates is now a criminal offense. Individual fines range from USD 1,622 to USD 64,851, while corporate entities could face fines up to USD 324,254. The amendment introduces specific conversion quotas based on business sectors and ownership. For the tourism industry, Category A establishments must convert 40 percent of their monthly gross sales into Maldivian rufiyaa, eliminating the previous option of converting USD 500 per tourist. Category B establishments must convert either USD 25 per arrival or 20 percent of their monthly gross sales. Non-tourism businesses have seen their mandatory conversion threshold raised from USD 15 million to USD 25 million annually. Those exceeding this limit must convert 40 percent of their monthly gross sales through a licensed bank. Notably, the law provides a significant concession for wholly Maldivian-owned businesses, which are only required to convert 7 percent of their monthly gross sales. To implement these changes, businesses must deposit the required foreign currency into an account at an MMA-licensed bank and complete the conversion by the 28th day of the following month. These regulations officially come into force on September 1, 2026.