MMA Names Raha, South Palm for Foreign Currency Non-Compliance

The Maldives Monetary Authority (MMA) has named Raha Resort and South Palm Resort Maldives as the two resorts that have completely failed to comply with mandatory foreign currency exchange requirements under the Foreign Exchange Act.

The central bank said it decided to disclose the names of entities that have not carried out any foreign currency exchanges as required under the law.

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The MMA urged all parties required to exchange foreign currency under the Foreign Exchange Act to comply with the relevant legal and regulatory requirements. It also said a final opportunity would be given to entities that have not yet registered with the authority.

According to the MMA’s latest compliance report, 78 percent of resorts have properly carried out their foreign currency exchange obligations, while 20 percent have not met the requirements adequately.

The authority said several resorts within the latter group had requested concessions for various reasons. However, it reminded these establishments that they remain responsible for fulfilling their obligations under the applicable rules.

Compliance Among Other Tourism Establishments

The MMA’s report also assessed compliance among tourism establishments classified under Category B, which includes guesthouses, tourist hotels, safaris and homestays.

Of the registered establishments in this category, 48 percent had properly conducted foreign currency exchanges, while 15 percent had not met the requirements adequately. A further 37 percent had not exchanged any foreign currency.

The MMA said many Category B establishments are small and medium-sized businesses and that it is working to provide additional opportunities within the legal framework while conducting further awareness programmes to improve compliance.

Category C covers businesses with annual revenues exceeding USD 15 million. The report found that 38 percent of establishments in this category had properly carried out foreign currency exchanges, while 33 percent had not met the requirements adequately and 29 percent had not exchanged any foreign currency.

The MMA said establishments in Category C had also requested concessions. However, any concession for these businesses would require amendments to the Foreign Exchange Act, and proposed amendments have been submitted for consideration.

How Exchanged Dollars are Used

Under the Foreign Exchange Act, the MMA retains 90 percent of the foreign currency exchanged by entities subject to the requirement. Of this amount, 30 percemt is released to banks, with priority given to Maldivian banks.

The MMA said the funds released to banks must be used for specified purposes, including meeting essential public needs and financing food imports. A significant portion is also used to provide foreign currency assistance to small and medium-sized enterprises.

The authority said this means foreign currency exchanged by resorts ultimately supports businesses and the public. It added that a significant portion of the foreign currency held by the MMA is used to finance imports of essential goods, including food, gas, fuel and medicines.