Dollar-starved Maldives notifies new foreign currency regulation

Maldives last month averted a potential default on an Islamic bond payment after India extended a $50 million interest-free loan

MALE: Dollar-starved Maldives has floated a new foreign currency regulation, limiting types of transactions allowed in foreign currency and imposing mandatory foreign currency exchange controls on tourism establishments and banks.

Maldivian economy appears to have taken a hit after calls to Indian tourists to avoid the picturesque island nation as a response to President Mohamed Muizzu's 'India Out' campaign last year. .

With its forex reserves not matching its import bill, the island nation's central bank, Maldives Monetary Authority (MMA) on October 1 introduced a new regulation, requiring all foreign currency income generated by the tourism industry to be deposited in local banks. MMA, which had in August imposed a strict dollar limit as Maldives found itself in a dollar shortage, published the new rules in the local Dhivehi language.