• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Maldives Government Offers Concessions to Quell Revolt By Resort Operators
Finance

Maldives Government Offers Concessions to Quell Revolt By Resort Operators

December 10, 2024No Comments6 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Maldives Government Offers Concessions to Quell Revolt By Resort Operators
Share
Facebook Twitter LinkedIn Pinterest Email

The Maldives government has offered concessions to resolve a tense standoff with the tourism industry over foreign exchange controls.

On December 9, the government proposed a new foreign exchange law to codify a new requirement for tourist establishments to convert foreign currency earnings into Maldivian rufiyaa.

The Foreign Exchange Act is intended to lend greater legal weight to regulations enacted by the central bank on October 1, which made it mandatory for resorts to exchange $500 per tourist with a local bank. A rate of $25 per tourist was set for smaller hotels and guesthouses on inhabited islands. The first conversion deadline is due on January 28.

After fierce opposition from resort owners, the proposed law was submitted to Parliament with new provisions sought by the tourism lobby. In addition to the fixed rates per tourist in the regulations, the bill offers the option of exchanging 20 percent of monthly foreign currency income instead.

It also includes other changes based on concerns raised by resort operators. Children under the age of two, guests staying on a complementary basis, and tourists who spend less than 24 hours at the property would be exempt in calculating the conversion obligation. Live-aboard vessels and hotels on inhabited islands with more than 50 rooms would be recategorized to fall under the rate of $25 per tourist.

But the government has not compromised, President Mohamed Muizzu insisted on December 9.

“I have made it clear that [the amount to be exchanged] should not exceed 20 percent of the establishment’s monthly revenue. Therefore, as discussed with resort owners, either $500 or 20 percent of total revenue must be exchanged. The law will mandate this. There are no changes to how I instructed the bill to be formulated,” he was quoted as saying by state media.

See also  Conservatives sour on bipartisan TikTok ban, cite concerns about government overreach

The new rules seek to remedy a persistent dollar shortage. Reflecting the excess demand and severity of the imbalance, recent rates in the parallel exchange market have been 15 to 20 percent above 15.42 Maldivian rufiyaa per U.S. dollar, the de facto exchange rate. The black market rate currently hovers over 19 Maldivian rufiyaa.

Despite substantial and reliable foreign currency receipts from the archipelago’s renowned luxury tourism — most of which flows out without entering the domestic banking system — official foreign exchange reserves have been stretched thin by rising debt payments and a high import bill for food, fuel, and other commodities.

The forex policy was part of a wider economic reform agenda devised to shore up the depleted reserves and avert a looming debt crisis.

But resort businesses recoiled when the regulations came into force in October. The Maldives Association of Tourism Industry (MATI), a powerful group representing resort owners, called the compulsory exchange controls “unacceptable,” and accused the authorities of failing to consult stakeholders or address their concerns.

By mid-November, the resort industry was in open revolt. Several local operators refused to comply.

Mandatory conversion places an undue financial burden as dollar revenue is needed to cover wages, taxes, and debt payments, Universal Enterprises and Pulse Hotels and Resorts informed the central bank.

In a letter to the central bank’s governor, Universal Chairman Mohamed Umar Manik — one of the pioneers of Maldives tourism — objected to the flat rate of $500 per tourist, which does not account for duration of stay or range of accommodation. A resort could be forced to exchange $2,000 for a family of four who stays four days for the price of $1,000, he argued.

See also  Netanyahu's Government Proceeds with First Judicial Reform, Despite Protests

Resort magnate Mohamed Moosa joined the chorus of calls for the government to reverse the forex policy.

“This policy threatens the financial stability of resorts and could lead to the collapse of our businesses,” Ahmed Siyam Mohamed, a member of parliament and owner of the Sun Siyam resorts, warned on the opposition-aligned Raajje TV, slamming the exchange requirement as “robbery.”

But Muizzu looked to be up for a fight. In a post on X, he characterized resort owners as “politicians who do not wish any good for the poor,” assuring that his administration was “on the side of the people.”

At a ceremony on November 17 to mark the government’s first anniversary, Muizzu asserted repeatedly that he would not back down. “I am stating this very clearly, I will not change the regulation,” he declared. Only 1.5 percent of the tourism industry’s annual revenue of $4.5 billion was exchanged in local banks last year, Muizzu said, citing it as a figure that could rise to 20 or 25 percent.

On his X account in late November, Muizzu offered timelines for lifting restrictions on foreign transactions. Current limits on both credit card usage and dollar allocations for travelers and importers will be raised, he pledged. State-owned enterprises could stop buying dollars from the black market by July 2025, Muizzu said.

According to the International Monetary Fund (IMF), the tourism industry “appears to be a key supplier and driver” of the dollar black market. The market’s stable premium was indicative of an oligopoly with “only a few large suppliers of foreign exchange who are able to adjust supply to the parallel foreign exchange market,” the IMF observed.

See also  Subway Offers Free Sandwiches That Come With A Lifetime Commitment

The black market premium creates a compelling incentive for resorts that need to convert a portion of foreign currency revenue into rufiyaa to cover operational costs. They would forgo this hefty return by exchanging with local banks.

The forex controls also come on top of tourism-related tax hikes. Sizeable rises in dollar-denominated departure fees and airport service charges took effect on December 1, prompting a slew of negative headlines about the Maldives becoming “more expensive to leave, too.”

Expressing discontent in the business community, a local resort owner told TTG Asia on the condition of anonymity that the “high taxes will kill the industry.”

“All our expenses, including food imports, loan repayments, fuel, utilities, salaries, and service charges, are paid in dollars, and we don’t have enough dollars for the compulsory exchange,” the resort operator complained.

The central bank addressed such complaints during a press briefing on November 27. Increased dollar inflows would enable banks to offer overdraft facilities to resorts that need support, Governor Ahmed Munawar suggested. Those unable to meet foreign currency obligations could also apply for deductions, he noted.

“The aim is to ensure dollars are available through formal banking channels and not through informal markets,” the central bank governor stressed, citing similar foreign exchange restrictions in developing economies such as Malaysia.

“This is not a new concept,” Munawar said. “Dollars earned by resorts should circulate within the economy to generate a multiplier effect.”

Concessions government Maldives offers Operators quell Resort Revolt
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025

How China’s Companies Are Responding to the US Trade War

April 16, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

China Doesn’t Have to Feed Kids Antisemitism and Terror Support, Schools Do It for Them

November 18, 2023

Pakistan Court Grants Permission To Police To Arrest Imran Khan In May 9 Riot Case

August 24, 2023

The Floodgates Open Against Fox as a New Defamation Suit is Filed

May 12, 2023

Ending THC use may reverse its impacts on male fertility

March 31, 2023
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Vanderpump Rules fans get annoyed seeing Raquel Leviss smile when Tom Schwartz calls their kiss “liberating”

May 25, 2023

Lawyer Claims Browns Owner Jimmy Haslam Admitted to Bribery Claims in Recent Testimony

December 25, 2023

MAGA Rep. Marjorie Taylor Greene Was Expelled From the Conservative House Freedom Caucus

July 8, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.