Nasheed warns MMA’s 40 percent Dollar plan could discourage foreign investment
Former President Mohamed Nasheed has raised concerns over a proposal to require resorts to convert 40 percent of their U.S. Dollar earnings through the Maldives Monetary Authority (MMA), warning that the policy could negatively affect investor confidence and the long-term stability of the tourism industry.
In a post on X addressing the Maldives' ongoing foreign exchange challenges, Nasheed said the proposed requirement could create serious economic consequences for resorts, particularly those with significant financial obligations denominated in US dollars.
Mandating that resorts sell 40% of their USD earnings to the MMA is a policy that risks severe economic consequences.
Nasheed said
Nasheed noted that many resorts carry substantial U.S. Dollar-denominated debt and that a large portion of the tourism sector consists of foreign-owned investments financed primarily through bank borrowing.
He argued that competitive returns have been a key factor in attracting international investors to the Maldives.
Foreign investors were attracted to the Maldives precisely because it offers competitive returns. Undermining that incentive threatens both investor confidence and the long-term stability of the tourism sector.
Nasheed stated
His comments follow an announcement by MMA Governor Ahmed Munawar that preparations are underway to amend foreign exchange regulations and increase the mandatory conversion requirement for resort earnings from 20 percent to 40 percent.
The proposed amendments would also increase the frequency of mandatory conversions, reducing the current three-month period to a monthly requirement.
The MMA is additionally planning to strengthen oversight of how businesses use their remaining foreign currency after completing the required conversion.
The measures are part of broader efforts to increase the availability of U.S. Dollars within the formal banking system and ease ongoing foreign exchange pressures.
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