Yameen says resorts forced to convert 40 percent because gov't cannot manage forex

Former President Abdulla Yameen Abdul Gayoom says the government’s decision mandating resorts to convert 40 percent of their dollar revenue is a sign that the administration is unable to manage the country’s foreign exchange situation.

Speaking at the Front Office PNF rally held at his residence on Sunday evening, Yameen criticised the amendment brought by the Maldives Monetary Authority (MMA) on August 31. The amendment bans the publication of black-market dollar rates above the official price and mandates resorts to convert 40 percent of their foreign currency earnings through Maldivian banks.

Yameen said President Dr. Mohamed Muizzu is “the only president who dared to force resorts to convert 40 percent,” and noted how some parties are unhappy with the change. He said the government maintains the policy is in the public interest, but argued that the underlying issue is mismanagement.

According to Yameen, previous administrations did not require resorts to convert all their foreign currency earnings because the economy was stable and debt obligations were met without such measures. He said the sector reacted strongly when the government ordered resorts to convert “all the dollars” they received.

“The figures here show that the highest foreign exchange inflows in the last two years, compared to previous years, have been during President Muizzu’s government. So isn’t this total mismanagement?” Yameen said.

President Muizzu, defending the amendment, said resorts must convert 40 percent of their foreign currency revenue to the MMA, but that salaries of resort employees should continue to be paid in dollars.

He said the tourism industry earned USD 5.6 billion last year, but only USD 3.8 billion entered the banking system, with just 21 percent converted. The new amendment, he said, will increase foreign exchange availability, allow essential imports to be routed through the MMA, and provide significant concessions for businesses importing basic goods.

The President also addressed concerns raised by resort owners, saying the change was introduced after detailed analysis by the MMA, the Ministry of Finance, and the Ministry of Economic Development.