The Maldivian government has set a target to eliminate the black market for US dollars and restore access to foreign currency at the official bank rate by the end of 2027. President Dr Mohamed Muizzu outlined the administration’s approach in two recently launched government podcasts, where he discussed the progress and impact of ongoing foreign exchange reforms.
At the centre of the strategy is the new Foreign Currency Act, introduced earlier this year. The law requires tourism and high-earning non-tourism businesses to deposit a portion of their foreign currency earnings into Maldivian banks. This move aims to redirect foreign exchange inflows from informal channels into the formal banking system, thereby easing the shortage of dollars in the official market.
Tourist establishments are categorised into two groups under the regulation. Larger operators—such as resorts, integrated resorts, and private islands—must exchange either USD 500 per tourist or 20 percent of their monthly revenue. Smaller entities—including guesthouses, tourist hotels, and vessels—are required to exchange USD 25 per tourist or the same percentage of monthly revenue. Additionally, non-tourism businesses earning over USD 15 million in foreign currency annually must convert 20 percent of their income via domestic banks.
According to the President, these changes are already having an effect. Since the start of the year, more than USD 150 million has reportedly been deposited into the local banking system under the new rules, representing a 40 percent increase from previous figures. Government data suggests that compliance is high, with around 95 percent of entities meeting their obligations under the law.
The administration believes that continued cooperation from the private sector, particularly the tourism industry, will be critical in sustaining this momentum. The long-term objective is to reduce reliance on informal markets, stabilise the exchange rate, and make foreign currency more accessible through formal banking channels.
While the black market rate for the dollar still hovers above MVR 18, the government has stated its ambition to bring the official rate down to MVR 15.42 by the end of President Muizzu’s term. Achieving this, officials say, will require full enforcement of the new law, continued economic discipline, and strategic collaboration across sectors.
With foreign exchange concerns ranking high among public grievances, the administration has made it clear that improving dollar availability and transparency in currency transactions remains one of its key economic priorities.
