The Maldives Association of Tourism Industry (MATI) stated today that mandating resorts to exchange 40 percent of their foreign currency earnings is not feasible.
In a press release, MATI explained that resorts incur significant dollar-denominated expenses, including fuel, salaries, service charges, taxes, and international loan repayments. The association argued that converting 40 percent of total revenue into local currency is not a sustainable business model.
MATI noted that during a meeting with the Maldives Monetary Authority (MMA) earlier this month, discussions had centered on a 20 percent exchange requirement. The association expressed concern that the government’s sudden decision to increase this to 40 percent without further consultation would pose challenges to the tourism industry.
The association further stated that allegations of illegal foreign exchange transactions by certain resorts should not be used as a pretext to impose sweeping changes across the entire sector. MATI emphasized that it is unjust to implement burdensome policies on the whole industry based on allegations against individual operators.
Additionally, MATI asserted that portraying the black market as an issue exclusively linked to resorts is factually incorrect.
Referring to a meeting at the President’s Office yesterday, where investigative agencies reportedly alleged that some resort operators were trading dollars on the black market and driving up exchange rates, MATI clarified that it has no knowledge of such activities. The association reaffirmed its commitment to ensuring all members fully comply with laws and regulations.
Representing 146 of the 200 resorts operating in the Maldives, MATI highlighted that its members are among the largest contributors of foreign currency to the national economy and the banking system.
MATI reiterated its commitment to working sincerely with the government on national economic issues. The association expressed its readiness to engage in further dialogue with the government and the MMA to find a fair, sustainable, and fact-based solution to the current challenges.
The MMA is currently working on legislative changes to replace the existing requirement of exchanging $500 per tourist with a mandatory 40 percent conversion of total gross revenue.
According to central bank statistics, the tourism sector exchanged $1.7 billion (MVR 26.2 billion) with local banks during the first year the Foreign Exchange Act was implemented. This increased the dollar conversion rate to 21 percent, up from previous levels of 9 to 15 percent.
Despite these measures, the value of the dollar has not decreased, with black market rates currently reaching MVR 23 per dollar.
