MATI Raised Alarm Over MMA’s Foreign Exchange Controls

The Maldives Association of Tourism Industry (MATI) shared grave concerns before the Maldives Monetary Authority’s (MMA) imposing foreign exchange controls in October, telling the governor that it could severely impact investor confidence and the broader economy.

The central bank’s regulation, introduced in October, mandated tourist establishments to convert their dollar earnings into Maldivian Rufiyaa,

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In a letter dated 29 September 2024, sent to MMA Governor Ahmed Munawar, MATI warned that the policy would heighten financial risks for investors and deter much-needed foreign investment. The letter came just two days before the MMA officially announced the new rules.  

Tourism, the backbone of the Maldivian economy, has historically benefited from open exchange policies. MATI highlighted that some resorts are already operating with Gross Operating Profit (GOP) margins as low as 30%, adding that additional constraints could exacerbate financial pressures.  

The association cautioned that restricting dollar retention could lead to inflation and the potential devaluation of the Maldivian Rufiyaa, with ripple effects on resort operations, service quality, and guest experiences. MATI also refuted claims that the industry fails to retain foreign currency within the country, emphasizing its substantial local investments and contributions.  

Calling for more extensive stakeholder consultations, MATI urged the MMA to reconsider the policy, warning of unpredictable economic consequences if implemented hastily.  

This week, Prominent Maldivian tourism entrepreneur Champa Uhchu Mohamed Manik also called on the government to suspend the foreign currency regulations.

MATI, a longstanding advocate for the tourism sector’s business interests, has consistently lobbied against successive governments’ efforts to regulate the foreign currency market.