President Dr Mohamed Muizzu has officially ratified the Foreign Currency Bill, which was passed by Parliament during its 60th sitting on December 12, 2024.

The new law, which will take effect on January 1, 2025, aims to enhance the management of foreign currency transactions and regulate currency exchange practices across the Maldives.

The legislation stipulates that all domestic transactions must be conducted exclusively in Maldivian Rufiyaa, barring specific exceptions outlined within the law. Additionally, it prohibits charging Maldivian nationals in foreign currencies for services provided or acquired within the country.

A key provision of the Act establishes a framework for businesses to exchange foreign currency acquired from their sales proceeds. These businesses must conduct currency exchanges with banks operating in the Maldives, which are subsequently required to sell a designated portion of the exchanged foreign currency to the Maldives Monetary Authority (MMA). Businesses are categorised into three groups based on their operations and revenue, with distinct exchange requirements for each category:

Furthermore, the Act requires businesses operating within the tourism sector or those exceeding the USD 15 million threshold in foreign currency transactions to register with MMA. These businesses must also ensure that their realised foreign currency proceeds are transferred to a local bank.

MMA has been tasked with overseeing the Act's implementation, with supporting regulations set to be introduced within two months of its enforcement.

The ratification of the Act will also repeal certain existing regulations, including sections 22(a) and (b) of this Act, the Foreign Currency Regulation (2024/R-91), and sub-sections (d) and (e) of section 24 of the Maldives Monetary Act (Law No. 6/81).

The legislation has now been published in the Government Gazette, following its ratification.