Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

MALDIVES

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyThe currency of Maldives is the Maldivian rufiyaa.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe rufiyaa is pegged to the dollar at the rate of Rf 12.80 per $1. The Maldives Monetary Authority (MMA) buys and sells currency at a spread of Rf 0.10, within which commercial banks and foreign exchange dealers also must operate.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirements
Use of foreign exchange among residentsThe use of foreign currency for domestic payments is prohibited, and conversion between domestic and foreign currencies may be effected only by licensed entities.
Payments arrangementsNo.
Administration of controlNo.
International security restrictions
In accordance with UN sanctionsYes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.a.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedNo distinction is made between accounts held by residents and those held by nonresidents.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresImport operations may be conducted only after registration with and obtaining licenses from the Ministry of Trade and Industries (MTI).
Open general licensesAll goods may be imported under an OGL system. Licenses are issued on application.
Licenses with quotasAll imports of rice, wheat flour, and sugar are subject to quota.
Other nontariff measuresProhibitions are imposed on imports in accordance with UN sanctions.
Import taxes and/or tariffsDuties are levied on all products other than rice, flour, and sugar. The tariff structure has 10 rates, ranging from zero for staple goods to 100% for cars and 200% for plastic bags, with an estimated average nominal duty rate of about 20%. Cigarettes are subject to a specific rate of Rf 0.30 a cigarette or Rf 6 a package. The tariff rate on electronic equipment is 5%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are issued by the MTI. The private sector may export all products.
Without quotasYes.
With quotasExports of aquarium fish are subject to a quota.
Export taxesA 50% tax is levied on the export of ambergris.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Controls on derivatives and other instrumentsn.r.
Controls on credit operations
Financial credits
By residents to nonresidentsWith the exception of commercial banks, natural and juridical persons may not extend credit and charge interest without MMA approval.
Controls on direct investment
Inward direct investmentInvestments require prior approval from the government. Foreign investors are required to provide that at least 75% of their equity shares be financed from outside Maldives.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsYes.
Sale locally by nonresidentsYes.
Controls on personal capital transactions
Transfer of gambling and prize earningsGambling is not permitted in Maldives.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchange
Interest rate controlsInterest rate control exists only with respect to local currency, for which the annual rate of interest chargeable on loans and advances may not exceed 20%.
Provisions specific to institutional investorsn.r.
Other controls imposed by securities lawsn.r.
Changes During 2004
No significant changes occurred in the exchange and trade system.

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