Parliament Greenlights Forex Bill to Tackle Foreign Currency Shortage

Parliament on Thursday adopted the government-proposed Foreign Currency Bill (Forex Bill) designed to mitigate the ongoing foreign currency shortage in the country. The bill, which mandates tourism facilities to exchange a portion of their foreign earnings through local banks, was passed with a majority vote of 56 lawmakers.

The Forex Bill, drafted by the Maldives Monetary Authority (MMA) with input from various stakeholders, was presented to the Parliament by Member of Parliament (MP) for Inguraidhoo, Ibrahim Falah. Following its introduction, the bill was reviewed by the Public Accounts Committee behind closed doors. After consideration and some amendments, the committee endorsed the bill on Thursday, paving the way for parliamentary approval.

The bill mandates tourist resorts to exchange either USD500 per tourist or 20 percent of their monthly foreign income through the banking system. Other tourism facilities, including guesthouses and safari vessels, according to the bill, must exchange USD25 per tourist or 20 percent of their foreign earnings every month.

Among the amendments included in the final bill are provisions to increase the age limit for children exempt from the requirements from 10 to 12 years. Tourist resorts experiencing financial difficulties may also apply for a reduction in the percentage of foreign income required to be exchanged, subject to approval by the central bank.

The passage of the Forex Bill comes at a time when lawmakers have been advocating for solutions to address the foreign currency shortage that has impacted the country‘s economy.