MATI cites MMA plan to end mandatory dollar conversion

The Maldives Association of Tourism Industry (MATI) said on Sunday that the Governor of the Maldives Monetary Authority (MMA) has indicated the central bank plans to repeal existing rules requiring resort businesses to exchange foreign currency into Maldivian rufiyaa through banks and move towards a floating exchange rate system.

The matter was discussed during an open session at MATI’s 36th Annual General Meeting held at Kurumba Maldives. During the discussion, a participant questioned why the Maldives continues to operate under a fixed exchange rate system rather than adopting a floating exchange rate system, where the market determines the value of foreign currency.

Responding to the question, MATI Secretary General Ahmed Nazeer shared details of discussions held between MATI and the MMA. He said the Foreign Exchange Regulation had been drafted despite objections raised by MATI, which represents tourism sector businesses in the Maldives.

Nazeer said MATI held a meeting with the MMA lasting about two hours before the regulation came into force. According to him, the MMA Governor stated during discussions that the regulation would be repealed at a later stage and that the fixed exchange rate system would eventually be replaced with a floating exchange rate system.

“It appears that many would accept that approach,” Nazeer said.

MATI Chairman Hussain Afeef asked during the meeting how long the transition would take. Nazeer said the Governor did not provide a timeframe for the change.

In response, Afeef said the process may already be under way.