The Maldives Monetary Authority (MMA) Governor Ahmed Munawar has clarified that no changes are being made to regulations requiring dollar conversion into the banking system. Instead, current work focuses on obtaining the necessary legal authority to improve financial stability.

At an MMA press conference, the Governor explained that the authority's capabilities are limited due to the absence of a Foreign Currency Bill. He cited significant decreases in dollar inflow to banks as motivation for the new legislation.

"Banks receive merely 3 per cent from the tourism industry, failing to reach even 10 per cent on average. This prevents banks from functioning properly," the Governor said.

He revealed that tourism sector conversions have dropped from 70 per cent pre-COVID to 50 per cent, while overall conversion has fallen from 20 per cent to 10 per cent.

The lack of proper legislation threatens essential services, including international bank card operations and dollar access for students abroad. The proposed law, which three previous governors have attempted to establish, aims to address these critical vulnerabilities.

"We cannot convert everything to Maldivian Rufiyaa immediately because our reserve depends heavily on Government revenue. Hence, we are implementing changes gradually," said the Governor.

He added that for 15 years, Maldivians have had to rely on black market exchanges at rates above 15.42, which is an unsustainable situation.

The Governor highlighted that currency conversion into banking systems is standard practice globally, with the Maldives being an exception. The proposed changes would facilitate dollar access for both citizens and businesses; however, he noted that of the State's annual billion-dollar revenue, approximately 800 million goes towards fuel imports.

Additional critical expenditures include:

- 25 million dollars for staple foods

- 25 million dollars for healthcare

- 10 million dollars for Hajj and Umrah

- 45 million dollars for students

- 500 dollars per Maldivian travelling abroad

The Governor clarified that traveller allowances come from state reserves rather than the Bank of Maldives (BML). He emphasised that increasing these allowances requires implementing the proposed law and regulations.

He also acknowledged the President's support for the legislation, adding that gradual implementation would protect the State's reserves while ensuring improved dollar access for both citizens and businesses.