New Rules Ban Black-Market USD Rates, Impose MVR 500,000 Fines

The People's Majlis has passed the Foreign Exchange Bill, which mandates that the official exchange rate of MVR 15.42 per dollar be strictly adhered to in all reporting starting this September. Under the new legislation, publishing black market rates will be a punishable offense, carrying fines of up to half a million Rufiyaa.

During Wednesday's parliamentary sitting, amendments to the Foreign Exchange Act were passed with a majority of 47 members. Twelve members voted against the bill.

The government-sponsored amendment to the Foreign Exchange Act, submitted by PNC Member for Holhudhoo constituency Abdul Sattar Mohamed, has been sent back to the committee for further revisions.

Significant amendments have since been introduced to the bill. Notably, the committee has scrapped the initial provision requiring resorts to exchange foreign currency at a flat rate of $500 per tourist. Instead, an amendment was passed mandating that resorts exchange 40 percent of their total monthly foreign currency earnings. Furthermore, the committee has approved a provision criminalizing the advertisement or promotion of foreign currency exchange rates that deviate from the official rates set by the Maldives Monetary Authority (MMA). Under this amendment, disseminating such information through digital platforms or any other public medium to encourage unauthorized exchange rates will be considered a legal offense.

Furthermore, it has been resolved to criminalize the promotion and advertising of foreign exchange transactions conducted at rates exceeding the official exchange rate or the trading band established by the Maldives Monetary Authority (MMA).

The promotion and advertising of such information is defined as the public disclosure, publication, dissemination, or repeated distribution of foreign exchange rates that deviate from the official rates set by the Maldives Monetary Authority (MMA). This includes using digital platforms or any other means to advertise, encourage, or broadcast rates for the buying and selling of foreign currency outside the regulated framework.

It has been passed that individuals committing such an offense will be fined between MVR 25,000 and MVR 500,000. Furthermore, if the black market exchange rates are publicized by a legal entity or a registered business, the fine will range from MVR 100,000 to MVR 5,000,000.

Following the passage of these amendments, the ratification of this bill ensures that if an act prohibited under the law is also defined as a criminal offense by statute, the perpetrator may face criminal prosecution in addition to administrative penalties. Furthermore, effective September 1, regulations will prohibit the publication of exchange rates other than the official rate of MVR 15.42 per dollar. Reporting black market rates will carry potential fines of up to half a million Rufiyaa.