Banks in the Maldives exchanged USD 362 million from tourism companies in the first six months of this year, according to figures from the Maldives Monetary Authority (MMA).
This exchange was carried out under the new Foreign Exchange Act, which mandates that tourism businesses exchange a portion of their foreign currency income through local banks. Of the total exchanged, 60 percent was sold to the MMA, as required by the law.
The MMA revealed that 2025 and 2026 will be the peak years for external debt repayments. The state repaid USD 174 million in loans in the first half of this year, nearly double the USD 88 million repaid during the same period last year. Additionally, USD 27.5 million was paid toward bonds.
Before the Foreign Exchange Act came into force this January, tourism businesses were required to exchange just 10 percent of their foreign currency earnings. Since the enactment, the figure has risen significantly, with businesses now obligated to exchange 20 percent of their foreign income through banks.
Banks, in turn, must sell 90 percent of the foreign currency they acquire to the central bank. Half of the dollars received by the MMA are used to fund government expenditures and boost reserves, while the remaining 40 percent is sold back to the banks weekly to meet private sector demand and facilitate lending.
The policy shift has notably improved dollar liquidity within the formal banking system, the central bank said.
This exchange was carried out under the new Foreign Exchange Act, which mandates that tourism businesses exchange a portion of their foreign currency income through local banks. Of the total exchanged, 60 percent was sold to the MMA, as required by the law.
The MMA revealed that 2025 and 2026 will be the peak years for external debt repayments. The state repaid USD 174 million in loans in the first half of this year, nearly double the USD 88 million repaid during the same period last year. Additionally, USD 27.5 million was paid toward bonds.
Before the Foreign Exchange Act came into force this January, tourism businesses were required to exchange just 10 percent of their foreign currency earnings. Since the enactment, the figure has risen significantly, with businesses now obligated to exchange 20 percent of their foreign income through banks.
Banks, in turn, must sell 90 percent of the foreign currency they acquire to the central bank. Half of the dollars received by the MMA are used to fund government expenditures and boost reserves, while the remaining 40 percent is sold back to the banks weekly to meet private sector demand and facilitate lending.
The policy shift has notably improved dollar liquidity within the formal banking system, the central bank said.
