President Dr Mohamed Muizzu has reported that USD 214 million has been exchanged through local banks since the enforcement of the Foreign Exchange Act in January 2025. The law, which mandates the conversion of foreign currency earnings, particularly from the tourism sector, through the formal banking system, has been credited with strengthening the country’s foreign reserves and contributing to a budget surplus.
At a press conference held at the President’s Office, President Muizzu presented figures indicating that official reserves had remained above USD 700 million since the beginning of the year, reaching USD 791 million by the end of March. The increase is linked to the mandatory deposit and conversion of tourism sector earnings through domestic banks.
The Foreign Exchange Act, which came into force on 1 January, establishes a structured process for managing foreign currency inflows. It requires all non-exempt transactions to be conducted in Maldivian Rufiyaa and outlines regulations for the import, use, deposit, and exchange of foreign currency. Businesses conducting over USD 15 million in annual foreign currency transactions, including tourism establishments, are required to register with the Maldives Monetary Authority and channel their earnings through licensed banks.
According to the President, these changes are intended to increase oversight, reduce pressure on the informal dollar market, and ensure wider access to foreign currency for the general public. Planned benefits include increasing the current foreign currency travel allowance and easing transaction limits on bank-issued credit cards.
President Muizzu also outlined the broader fiscal situation. As of April 2025, government revenue stood at MVR 12.4 billion, while expenditure totalled MVR 10.5 billion. This resulted in a reported budget surplus of MVR 1.9 billion and a primary surplus of MVR 3.5 billion. The administration has also allocated MVR 2.5 billion to repay loans taken on by previous governments, including a recent payment of USD 100 million.
Looking ahead, the President reaffirmed his administration’s intention to reduce total debt to MVR 9 billion by year-end and to remain on schedule with foreign loan repayments.
