For nearly two decades the Maldives has run short of dollars. Governments changed and policies changed. The problem didn't.
What makes that strange is that this isn't a country without foreign currency. Tourism earns billions a year. Yet an importer can't get dollars for a shipment and a family can't get them for travel. A parallel market grew up where the dollar costs far more.
So the question is simple. If we earn that many dollars, why aren't they in our banks?
It isn't only what we earn
A lot of tourism revenue never touches a Maldivian bank. It's collected by tour operators and booking platforms, or paid into accounts held abroad.
Plenty of that is ordinary business. A resort with foreign owners and foreign lenders has bills to pay in dollars, and reasons to hold currency where the obligations sit. But those arrangements still answer to Maldivian law. Revenue has to reach the accounts the law requires and the declared figures have to be right. Withholding tax on payments abroad has to be paid as well. In an economy this dependent on one earner, it's the obvious thing to check, and checking accuses the industry of nothing.
The conversion rule may have been working
From January 2025 a Category A establishment chose how to comply: 500 dollars a tourist, or 20% of monthly foreign currency sales. The MMA says it worked. Its 2025 annual report credits mandatory conversion with raising inflows and letting the Authority supply more dollars through the commercial banks, and in June 2025 it tightened the other end too, lifting the share of those dollars that banks must sell on to the central bank to 90%.
Then it asked for more. The MMA proposed closing the per-guest route and putting every Category A business on one percentage of sales instead, first 20% and then 40%. That's what passed.
The World Bank put external debt service at about 1.7 billion dollars in 2026 against 630 million in 2025. Dollars came in and went straight out to creditors.
So the policy can be working and the shortage can still bite. If a year's extra inflow is smaller than a year's extra repayment, the importer won't notice a thing. The policy's gains were already spoken for.
In force from 1 September 2026, it can't be judged in a quarter. What matters now is checking whether resorts are actually converting, and whether what they report matches the business they do.
Was this the moment to squeeze the market?
The parallel market grew because demand for dollars was bigger than the supply at the official rate, and it stayed because the gap stayed. Selling or advertising dollars above the MMA's rate or band is now a criminal matter under the amendment.
The economic question is one of order. What happens when you close an alternative source before the official one can carry the load? An importer still needs dollars. Shutting the window doesn't remove the need behind it. It can push the trade out of sight or land hardest on the businesses already short.
The reserve figure also flatters how much load the official system can take. Gross reserves in April 2026 were 717.9 million dollars, about 1.4 months of imports, once the sukuk and the swap repayments had gone out. Fitch put the usable part at 244 million, and about 311 million of the gross figure was rupees drawn under a separate facility with India, which its usable figure leaves out. The gross and usable figures are both true. Only one can pay for a shipment, and that's the one the banks ration from.
There's another sequence. Hold the 40% and police compliance hard, so more of the earnings arrive through banks. As banks meet more of the real demand, the reason to pay more elsewhere weakens, and the premium narrows because the shortage behind it did.
Follow the dollars to the source
Which is where the attention belongs. Instead of the dealers at the end, the MMA and MIRA could look at how tourism revenue is received, held, moved and sold. Are establishments depositing and converting as required? Do reported revenues match the business they actually do? Are management fees and commissions documented and taxed? What about related-party transactions? Are dollar sales receipted, and do they go through licensed channels at the permitted rate?
That last one carries the most weight. The amended Act requires currency exchange to be licensed, and to trade at the rate or band the MMA sets. So the thing to check is what came back for the dollars a seller declares. A business can record a sale at the permitted rate and take a second payment through another account, written up as a separate fee. Put the two together and you've got a different rate.
That's auditable. Receipts can be reconciled against bank statements, and payments split across accounts tied back together. Where the evidence holds, the penalties should apply, resort operators included.
Patience as much as pressure
The objective can't be to stop resorts operating internationally. Tourism earns the foreign currency and has to trade across borders. What can't follow is a position beyond Maldivian regulation. Plenty of dollars held abroad are there for good reasons. That line has to stay visible, or this turns into suspicion of the industry that pays for everything else.
The shortage won't end because rates stopped being advertised, or because dealers face a tougher law. The IMF said in June 2026 that the Foreign Currency Act, alongside official bilateral support, had eased foreign exchange pressure and helped rebuild reserves, while making clear the broader adjustment still has to happen.
We've spent too long chasing dollars after they reach the parallel market. Start earlier. Let the MMA and MIRA reconcile what each resort earns against what it deposits and converts, and tell the public what they find. Until we can say how much of the billions reaches our banks, we're only arguing about the dealers.
Sources
Annual Report 2025, Maldives Monetary Authority
Maldives Development Update, June 2026, World Bank
First Amendment to the Foreign Currency Act, President's Office
Changes to the foreign exchange banks must sell to the Authority, Maldives Financial Review
Fitch Upgrades Maldives to CCC- from CC, Fitch Ratings
Non-resident withholding tax guidance, Maldives Inland Revenue Authority
2026 Article IV mission statement, International Monetary Fund