The Maldives Monetary Authority (MMA) has raised the dollar allocation quota to local banks by an additional 10 percent, in a move aimed at enhancing foreign exchange access for small and medium enterprises (SMEs). The change, effective this week, allows banks to dedicate 40 percent of their weekly dollar allocation to support local businesses.
This adjustment builds on a major policy shift made in June, when the central bank increased the mandated foreign exchange requirement for local banks from 60 percent to 90 percent. Of this, 60 percent continues to be retained by MMA to service government obligations and bolster foreign currency reserves. However, the additional 30 percent is now being sold back to the banks weekly.
According to the MMA, the returned portion is earmarked for critical public needs—including essential food imports—and to provide sustained foreign exchange assistance to SMEs. The move aims to ensure a more balanced and responsive weekly dollar distribution system for local businesses navigating global market challenges.
With this policy revision, the share of dollars sold through banks to SMEs now stands at 30 percent. MMA has set a target to increase this figure to 50 percent in the near future, in line with efforts to promote equitable access to foreign currency across the private sector.
The change follows the enactment of the Foreign Exchange Act earlier this year, which mandates all tourism-related businesses to deposit or exchange their US dollar earnings through local banks. Since the law came into effect on January 1, over USD 364 million has been deposited in the banking system, bolstering liquidity and enabling stronger foreign exchange management.
According to MMA data, USD 174 million from the deposits has already been utilised for debt repayments in 2025—marking a 51 percent increase compared to the same period last year.
The central bank has described the new policy direction as part of a broader strategy to maintain economic stability, support local enterprises, and ensure that critical sectors have consistent access to foreign currency.
