Home Minister: Foreigners operating corner shops to run dollar black market

Minister of Homeland Security and Technology Ali Ihusaan has stated that undocumented expatriates are operating local corner shops as a front for illegal black market dollar trading.

Speaking at a press conference on Monday afternoon regarding an operation to curb illegal currency exchange, the Minister announced that an investigation is underway into 12 migrant workers suspected of involvement in large-scale black market dollar trading.

The Minister stated that investigations are currently underway based on information received through the hotline, and noted that nine foreign nationals suspected of involvement have already been taken into custody.

Furthermore, the Minister stated that some expatriate workers are depositing their salaries into business bank accounts registered under Maldivian names and converting those funds into US dollars on a daily basis. The Minister also noted that numerous expatriates have been intercepted at the border while attempting to illegally smuggle US dollars out of the country.

Foreign nationals have been observed operating corner shops as fronts for illicit currency exchange. Authorities have noted instances where salaries are deposited into business accounts registered under Maldivian names, only to be converted into US dollars daily. In some cases, individuals have been intercepted while attempting to smuggle these funds out of the country through border checkpoints.

Ali Ihusaan

The Minister further stated that investigations are underway into allegations involving various businesses and foreign nationals who exploited Telegraphic Transfer (TT) services to illicitly funnel US dollars out of the Maldives.

The Minister also issued a stern warning to Maldivians against complicity in such crimes. He emphasized that certain locals must immediately cease efforts to secure the release of detained expatriates by falsely claiming they were employed as domestic cooks or drivers.

Under the recent amendments to the Foreign Exchange Act, advertising or promoting the sale and purchase of foreign currency at rates exceeding the official exchange rate set by the Maldives Monetary Authority (MMA) is now prohibited. Furthermore, disclosing, disseminating, or publishing black market rates through digital platforms or any other means has been declared a criminal offense. Individuals found in violation of these regulations face fines of up to MVR 500,000, while legal entities and registered businesses may be fined up to MVR 5 million.

Furthermore, the annual threshold for mandatory foreign currency exchange for non-tourism businesses that generate US dollar revenue has been increased from $15 million to $25 million. While such businesses are generally required to exchange 40 percent of their monthly revenue, the mandatory exchange rate has been reduced to 7 percent for businesses that are 100 percent Maldivian-owned.

Under the new regulations, Category A establishments—including resorts, integrated tourist resorts, and private islands—are required to convert 40 percent of their monthly foreign currency earnings. Meanwhile, Category B establishments, such as guesthouses, hotels, and liveaboards, must convert either 20 percent of their monthly revenue or a fixed rate of $25 per tourist.

According to the government, these amendments were introduced to ensure that foreign currency earnings from local businesses remain within the domestic economy.