Rahaa, South Palm resorts named for failing to exchange dollars under forex law

The Maldives Monetary Authority (MMA) on Sunday named two resorts that it said had failed to exchange any US dollars as required under the Foreign Exchange Act.

The central bank identified Rahaa Resort in Laamu Atoll and South Palm Resort in Addu Atoll as the two properties that had not exchanged dollars in accordance with the law.

Rahaa Resort is operated by former Deputy Speaker of Parliament Reeko Moosa Manik, while South Palm Resort is operated by two Maldivian businessmen.

In its announcement, the MMA called on businesses subject to foreign exchange requirements to comply with the Act and regulations governing the exchange of foreign currency.

The central bank also said it was providing a final opportunity for parties that are required to register with the MMA but have yet to do so to complete their registration.

According to a compliance report issued by the MMA, 78 per cent of resorts are exchanging foreign currency in accordance with the requirements.

The report said 20 per cent of resorts were not exchanging dollars at the required level. The MMA also said 20 per cent of resorts had sought concessions over their foreign exchange obligations for various reasons.

The central bank said parties seeking concessions were still required to meet their obligations under the framework.

Under the Foreign Exchange Act, the MMA receives 90 per cent of the dollars exchanged under the system. Of that amount, 30 per cent is released to commercial banks, with priority given to Maldivian banks.

According to the MMA, foreign currency provided to banks under the arrangement is to be used for purposes including financing imports required by the public and providing foreign currency to small and medium-sized enterprises.

“The direct benefits of the dollars exchanged by resorts reach both businesses and the general public. Furthermore, a large portion of the dollars retained at the MMA is spent on importing essential goods needed by the nation, such as cooking gas, fuel and medicines,” the MMA said.

Rahaa Resort has previously faced proceedings related to an $11 million loan from Bank of Maldives. The property was listed for sale on two occasions over non-payment of the loan, before the High Court halted the sale pending the outcome of an appeal.

South Palm Resort in Addu is currently closed.