40 percent forex rule should not affect resort employee salaries and they should be receiving salaries in US Dollars: President Dr. Muizzu
President Dr. Mohamed Muizzu has said resorts must continue paying their employees in US Dollars despite new foreign exchange rules requiring tourism businesses to convert 40 percent of their foreign currency earnings through domestic banks.
The President made the remarks after ratifying amendments to the foreign exchange regulations today.
Under the revised framework, resorts operating in the Maldives will be required to convert 40 percent of their foreign currency revenue into Maldivian Rufiyaa through local banks.
President Dr. Muizzu said the amendments were an important step toward strengthening the country's foreign exchange system.
He also clarified that the changes would not alter the existing mandatory foreign currency conversion requirements for guesthouses.
The President said increased foreign currency circulation through the domestic banking system could provide wider benefits to the public and help support government spending and essential public services.
According to statistics, the tourism industry generated USD 5.6 billion last year. However, it is estimated that only USD 3.8 billion of this revenue entered the Maldivian banking system. Of that USD 3.8 billion, only 21 percent was reportedly converted through banks. Prior to the implementation of the new foreign exchange regulations, the conversion rate stood at a mere 10 percent.
President Dr. Muizzu said
He said the higher conversion requirement was intended to improve access to foreign currency and provide greater financial support for businesses, particularly small and medium-sized enterprises.
Addressing concerns raised by the tourism industry, President Dr. Muizzu said the Government introduced the new measures following extensive research, data collection, and financial analysis.
Converting 40 percent of foreign exchange earnings will not pose any difficulties for resorts. We are certain of this. It will not hinder their ability to repay loans taken for resort development, pay employee salaries, or cover operational expenses. Converting 40 percent is entirely feasible; of this, there is no doubt.
President Dr. Muizzu said
President Dr. Muizzu also stressed that the new requirement must not be used as a reason to discontinue the practice of paying resort employees in US Dollars.
I fully support and advocate for the concerns raised by resort employees. I strongly urge and emphasize that the practice of paying their salaries in Dollars must not be halted. No resort should take such a step, nor is there any valid excuse to do so.
President Dr. Muizzu said
The President called on resorts to comply with the amended law while continuing to meet their responsibilities to employees.
He said the measures were designed to strengthen the country's foreign exchange system and deliver broader economic benefits to the public.
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