'Daily budget for this website reached': nowhere left to buy a dollar

On social media over the past week, people reported receiving the message for Netflix, Airbnb, Google and Adobe subscriptions, Apple gift cards, an e-sim bought through Alipay and the software a furniture maker needs to run his CNC machine. Work payments worth US$700 failed for a developer, who said recovering a lapsed server payment cost him a night's sleep. 

On Monday morning, President Dr Mohamed Muizzu ratified amendments to the Foreign Currency Act doubling the portion of foreign currency earnings that resorts must convert. The revised law prohibits advertising or promoting rates above the official one of MVR15.42. 

The policy changes, which were proposed as the parallel market rate exceeded MVR22.80 last week, are accompanied by a crackdown on black market dealers. On Tuesday morning, police raided the office of Naid Investment on suspicion of large-scale unlicensed money changing activities. The company operates the Furaveri resort in Raa atoll. Its foreign currency bank accounts were frozen for the investigation.

The central bank shut down a licensed money changer last month. Six expatriates were detained in a joint police and Immigration operation on Monday. According to police, MVR54.4 million (US$3.5 million) and US$1.6 million circulated through their bank accounts over the past three years.

The parallel market is not new. But the past two weeks moved fast. Here is where things stand and how they got here. 

Because Bank of Maldives applies a daily limit on how much can be spent at a given merchant from cards linked to rufiyaa accounts. That’s on top of other monthly limits. The bank imposed the former quietly in May, alongside a cap of 30 overseas e-commerce transactions a month. Most customers found out when a payment failed. The bank has not published the limits, the reset time or the method. 

When BML launched its dollar investment scheme on 30 June, CEO Mohamed Shareef said it would let the bank ease the card limits for foreign transactions. The scheme pays holders of dollars an effective MVR19.275, above the peg, but below the price on the street.

Two months later, the limits are tighter. Video of Muizzu’s pledge in late 2024 to raise card limits once resorts start exchanging 20 per cent of revenue has also been doing the rounds on social media.

The president appeared vexed when a reporter reminded him of the promise at Monday’s bill signing ceremony. "What country are you living in?" he asked Dhauru’s Muzayyin Nazim, citing higher limits for overseas POS machines, medical and travel expenses, and students abroad to reject the premise that the dollar surrender policy has not improved the situation. 

Card payments, imports and state debt are all paid from the same pool of foreign currency, which overwhelmingly arrive through tourism. BML sold about US$1.6 billion over 36 months to meet personal and business needs, nearly 60 per cent of it for online transactions. Card spending alone has grown 3.7-fold since 2021, to an average US$39.3 million a month. Between 250,000 and 300,000 people now make foreign transactions on rufiyaa cards each month, according to the bank.

Despite a five percent drop in tourist arrivals over the Middle East conflict, foreign currency receipts increased one percent from last year. 

But according to the Maldives Monetary Authority, US$3.2 billion of last year's US$5.6 billion in tourism receipts entered the domestic banking system. The rest is billed, held and spent offshore. 

It is the ceiling of a band introduced in April 2011, when the rufiyaa was allowed to move 20 per cent either side of MVR12.85. The rate has sat at the ceiling ever since and the mid rate has never changed.

The Foreign Currency Act in January 2025 made it mandatory for resorts to exchange US$500 per tourist (US$25 for guesthouses) with an option for 20 per cent of revenue; a 30 per cent surcharge on Chinese shopping sites from July 2025; a rule from June 2025 obliging banks to sell 90 per cent of their foreign currency proceeds to the central bank at MVR15.42 (30 per cent of which is sent back to the banks); card caps in May; the BML investment scheme in June; and now 40 per cent, monthly, with the US$500 option removed.

Only 10 per cent of tourism foreign currency earnings that entered the domestic banking system was exchanged annually between 2021 and 2024, the central bank said. The figure was up to 21 per cent in 2025 after the conversion mandate was introduced.

Banks sold US$318.8 million out of foreign currency exchanged in the first half of 2026. 

But the parallel rate has kept climbing and reserves have kept falling: US$686.8 million at the end of June, down from US$832.4 million a year earlier, as the government drew down reserves to repay a US$500 million sukuk in April. 

Expenditure from the reserve as of June included US$608.6 million for foreign debt repayment, up 202 per cent from the same period in 2025. The amount of foreign currency sold to STO for fuel, food and medicine imports rose 25 per cent. 

The Maldives Association of Tourism Industry, which represents 146 resorts, says any requirement should not exceed 10 per cent. The group says resorts already pay in dollars for fuel, salaries, service charge, supplies, logistics, guest transfers, TGST, green tax, withholding tax, income tax, land rent and foreign currency loans. Doubling the requirement within weeks of the government proposing the removal of the US$500 per tourist is "not viable", MATI said. Long-pending exemption requests from resorts that cannot meet the existing requirement remain unresolved, it noted.

The opposition backed MATI. "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," former President Mohamed Nasheed warned.

MATI’s executives were summoned to the President's Office on 23 August and told that investigators had found some resort operators fuelling the parallel market. It said it has no knowledge of any such activity and that an allegation against some operators should not justify a rule for the whole industry.

Muizzu's answer on Monday was that no resort would struggle. He issued a warning: some businesspeople had told the government they would understate revenue, and a new system tracking every tourist's arrival, stay and departure would make that impossible within a month.

Because their pay could be next in line. The Tourism Employees Association of Maldives is gathering signatures on a petition opposing any shift to pay salaries or service charges in rufiyaa instead of US dollars.

"It will trigger financial distress, reduce the practical value of their earnings and push countless families into hardship. For migrant workers, it will make it even harder to send money home and support those who depend on them," reads the petition, calling on the government to withdraw the changes.

"If such payments are converted to MVR, the workers reserve the right to undertake lawful industrial action and peaceful protest to protect their rights and interests," they warned.

Muizzu said resorts must not stop paying in dollars. They can convert 40 per cent comfortably after accounting for dollar-denominated salaries, loan repayments and other operational expenses. Maldives Monetary Authority Governor Ahmed Munawar has said wages should move to rufiyaa by 2030 to build demand for the local currency. 

In July 2025, Trans Maldivian Airways told pilots and crew that a quarter of their pay would come in rufiyaa; they threatened to strike and the airline reversed within 24 hours. 

MMA Governor Ahmed Munawar said last week that 56 per cent of the foreign currency converted by the end of July went towards servicing foreign debt. He also said banks only cover about 20 per cent of what importers need.

The government has spent US$608.6 million on external debt servicing in the first half of the year. The opposition argues the shortfall has been met by printing rufiyaa, including MVR2.4 billion routed through the Pension Office. 

Imports in the first half of 2026 amounted to US$2.2 billion, up 29 per cent from last year, according to the MMA. Fuel imports by the State Trading Organisation accounted for the bulk of the increase. Merchandise exports in the same period was US$41.8 million, down 47 per cent from 2025 as fish catch hit a 16-year low.

The bank rate is unavailable in the quantities people need. The parallel market is now an offence. Licensed money changers are reported to be refusing to sell at the bank rate. 

Unclear. The amendment makes advertising or promoting sales above the band an offence carrying up to MVR5 million (US$324,250) where a business or legal entity is involved, and defines promotion to include publishing, disseminating or repeating information about such rates. The Maldives Journalists Association and Transparency Maldives read it as a ban on reporting the rate and urged parliament to reject the bill.

On 24 August, Munawar conceded the reserve is not large enough to defend MVR15.42. The MMA's goal is de-dollarisation and a managed float in two or three years.

Former MMA governor Ali Hashim and former finance minister Ahmed Inaz have argued for a version of the same thing: move transactions into rufiyaa so the country needs fewer dollars, then let the price find its level. They differ from the government on method. Inaz's position is that you incentivise people to keep money here rather than compelling them to hand it over.

Azeema Adam, who later ran the central bank, found the opposite risk in her doctoral thesis: the more tightly foreign currency is controlled, the more dollarised an economy becomes, because controls create shortages, black markets and an incentive to move money offshore.