President Muizzu to Launch System Blocking Foreign Currency Diversion Within One Month

President Dr. Mohamed Muizzu has announced that the government will implement a new monitoring system within one month to prevent the diversion of foreign currency and ensure compliance with the Foreign Currency Act. Speaking during a ceremony to ratify seven bills passed by the Majlis (the Maldivian Parliament), the President emphasized that the administration is committed to enforcing laws that stabilize the national economy. The current legislation requires resorts to deposit and exchange 40 percent of their total foreign currency earnings into Maldivian bank accounts. Addressing concerns from the tourism sector regarding operational costs, President Muizzu stated that the 40 percent requirement was based on extensive research. He assured stakeholders that the measure would not hinder the ability of any resort to operate effectively. Highlighting the scale of the issue, the President revealed that while the tourism industry generates over USD 5.6 billion in annual revenue, only USD 3.8 billion enters the formal banking system. Of that amount, only 21 percent is officially exchanged through banks. This gap forces many local businesses to rely on the black market for foreign currency, which subsequently drives up the cost of imported goods and essential services. "There may have been ways in the Maldives to manipulate the system and get away with it. We will not provide an opportunity for that," the President stated. He explained that the upcoming system will track tourist movements—including arrival, accommodation, and departure—to eliminate loopholes and manipulation. To further tighten oversight, the government is introducing amendments to the Payments System Act. These changes will mandate that businesses providing services in the Maldives process payments through point-of-sale (POS) machines operated by locally established banks. Additionally, the government plans to collect GST on services provided by overseas-registered tour operators and booking platforms operating within the Maldivian tourism industry. By ensuring foreign currency flows through formal channels, the administration aims to provide citizens and businesses with access to foreign exchange at official rates, reducing the reliance on volatile parallel markets.