Nearly $2 billion in tourism revenue didn't enter Maldives banks last year: MMA

Nearly USD 2 billion of the revenue generated by the Maldives tourism industry last year was not deposited into banks operating in the country, according to figures released by the Maldives Monetary Authority (MMA).

Statistics shared by the central bank with the media on Tuesday show that tourism businesses generated USD 5.7 billion in revenue last year.

Of this amount, USD 3.8 billion was deposited into banks operating in the Maldives, accounting for about 68 per cent of total tourism revenue. This leaves about USD 1.9 billion that did not enter the domestic banking system.

The figures come as the MMA moves to increase the amount of foreign currency flowing through banks and reduce the gap between the official exchange rate and rates in the parallel market.

According to MMA data, USD 1.8 billion in foreign currency was converted through domestic banks last year. Of this, 21 per cent was converted under requirements imposed through the country's foreign exchange regulations.

The MMA also sold an average of USD 768.5 million to banks during the year.

The central bank said the amount of foreign currency converted through banks increased by 21 per cent following the introduction of mandatory foreign exchange surrender requirements for resorts.

The MMA also reported an increase in the share of tourism earnings entering the domestic banking system.

The figures were released as the central bank prepares further changes to the foreign exchange framework governing tourism businesses.

Under the current system, resorts have the option of converting either USD 500 per tourist arrival or 20 per cent of their foreign currency revenue into Maldivian Rufiyaa.

The MMA has announced plans to amend the Foreign Exchange Act to remove the USD 500-per-tourist option. Resorts would instead be required to convert 20 per cent of their total foreign currency revenue.

The central bank is also proposing measures requiring resorts to maintain designated accounts with banks in the Maldives for their dollar earnings and to route payments through point-of-sale systems connected to domestic bank accounts.

The MMA has said the measures are intended to increase the circulation of foreign currency through the domestic banking system and strengthen access to US dollars through regulated channels.