Yameen urges resorts to oppose 40% forex conversion requirement

Former President Abdulla Yameen on Thursday called on resort operators to oppose the requirement to convert 40 per cent of their foreign currency revenue through local banks, arguing that the measure could affect their ability to meet expenses denominated in foreign currency.

Speaking at a People’s National Front (PNF) town hall meeting in Fuvahmulah, Yameen criticised the amendment to the Foreign Exchange Act passed by Parliament on Wednesday.

Under the existing Foreign Exchange Act, resorts were given the option of converting either 20 per cent of their quarterly foreign currency revenue or USD 500 for each tourist arrival.

The government submitted amendments to Parliament on 11 August to remove the USD 500 per tourist option. Maldives Monetary Authority (MMA) Governor Ahmed Munawwar later announced that the conversion requirement would be increased to 40 per cent of resort revenue.

The 40 per cent requirement was subsequently included in the legislation before it was passed by Parliament.

Yameen said resorts have expenses that must be settled in foreign currency, including repayments on overseas loans taken to finance resort development, as well as payments for supplies and other operational requirements.

He argued that requiring resorts to convert 40 per cent of their foreign currency revenue could leave operators without enough foreign exchange to meet these obligations.

Yameen referred to concerns raised by the Maldives Association of Tourism Industry (MATI), which has opposed the increase in the conversion requirement. He said the association had advised the government that requiring resorts to convert more than 10 per cent of total revenue would not be viable for the industry.

He called on resort operators to raise their concerns individually rather than leaving the matter solely to MATI.

“All resorts — not just MATI — individual resorts must stand up and say this is unacceptable and that they cannot bear this burden,” Yameen said.

Yameen also warned that the requirement could affect the financial position of resorts and, in some cases, their ability to continue operating.

“Every resort must state clearly that they cannot carry this out. This policy harms every resort, and even shutting down operations temporarily would mitigate losses compared to complying,” he said.

Tourism industry groups have raised concerns over the 40 per cent requirement, citing foreign currency expenses including salaries, service charge, supplies, logistics, guest transfers, taxes, tourism land rent and foreign currency loan repayments.