MDP MP proposes Parliament meet tourism stakeholders regarding FX concerns

North Galolhu MP Mohamed Ibrahim (Kudu), a lawmaker from the main opposition Maldivian Democratic Party (MDP), has asked that tourism stakeholders been called for a meeting with the Parliament’s Economic Committee to share their concerns regarding new foreign exchange regulations formulated by the central bank.

He made the request in a letter to Speaker Abdul Raheem Abdulla on Wednesday evening, regarding two new regulations the Maldives Monetary Authority (MMA) published on October 1; the Regulation on Foreign Currency and the Regulation on Money Changing Business. It requires all tourism revenues to be deposited in the Maldives and imposes a mandatory surrender of USD for each tourist.

It requires ‘Category A’ tourist establishments - tourist resorts, integrated tourist resorts and resort hotels – to exchange USD from a local bank at the rate of USD 500 per tourist for all monthly arrivals before the 28th day of the third month following each respective month.

Meanwhile, ‘Category B’ tourist establishments – tourist guesthouses and hotels in residential islands with registered rooms of 50 or under - must exchange USD in the same manner, but at the rate of USD 25 per tourist.

In his letter, Mohamed Ibrahim said the decision to impose a USD rate per tourist is of deep concern to tourism stakeholders, especially over the significant impact it could have on guesthouses and lower-tier resorts.

Mohamed Ibrahim said that while the MMA had held consultations with tourism stakeholders before formulating the new regulations, and proposed different formulas, the Maldives Association of Tourism Industry (MATI) has said that the MMA failed to address the concerns raised by tourism stakeholders during the meetings.

In his letter, Mohamed Ibrahim said that many tourism establishments had refused to register for USD exchange by the October 30 deadline, and that over 50 resort operators had sent letters to the MMA expressing concern.

“I have also been informed that they said the aforementioned regulation is foreign to the realities of tourism business, does not correspond with the country’s current economic situations, and communicated the adverse effects it will have on the financial situation, with supporting details and statistics,” he wrote.

Mohamed Ibrahim therefore asked that the Parliament meet with tourism stakeholders to clarify and examine their concerns regarding the new regulations.

He asked that it be done in an open meeting with the Parliament’s Economic Committee.

On Wednesday, the MMA announced that 173 out of 174 resorts operating in the Maldives had registered by the October 30 deadline.