Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

MALDIVES

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article XIVYes.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictions
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
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 buying rate of Rf 12.75 per $1 and a selling rate of Rf 12.85 per $1.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency
requirements
Controls on the use of domestic currency
For capital transactionsn.r.
Use of foreign exchange among residentsThe use of foreign currency for domestic payments is prohibited, except for payments of taxes, rents, payments for goods and services, and fines due to the government from foreign exchange earners. Conversion between domestic and foreign currencies may be effected only by licensed entities.
Payments arrangementsNo.
Administration of controlNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)n.r.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
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 registering with and obtaining licenses from the Ministry of Economic Development and Trade (MEDT).
Negative listProhibited items are listed in Law 4/75.
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 quotas.
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.
References to legal instruments and hyperlinksLaw 4/75.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesExport licenses are issued by the MEDT. 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.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
Controls on capital and money market instruments
On capital market securitiesEffective July 31, 2006, public issues are approved by the Registrar of Companies under the Companies Act (Law No. 10/96) and the prospectus Regulation and the Capital Market Development Authority under the Maldives Securities Act (Law No. 2/2006) and the rules made thereunder.
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Controls on derivatives and other instruments
Purchase locally by nonresidentsn.r.
Sale or issue locally by nonresidentsn.r.
Sale or issue abroad by residentsn.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 approval from the Maldives Monetary Authority.
Controls on direct investment
Inward direct investmentInvestments require prior approval from the government. Foreign investors are required to ensure that at least 75% of their equity shares are 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.
References to legal instruments and hyperlinksCompanies Act, Law No. 10/96; Maldives Securities Act, Law No. 2/2006.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsEffective June 1, 2006, the minimum reserve requirement of commercial banks was reduced to 25% from 30% of their total demand and time liabilities.
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 investors
Insurance companiesn.r.
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Capital transactions
Controls on capital and money market instrumentsJuly 31. Public issues were approved by the Registrar of Companies under the Companies Act (Law No. 10/96) and the prospectus Regulation and the Capital Market Development Authority under the Maldives Securities Act (Law No. 2/2006) and the rules made thereunder.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsJune 1. The minimum reserve requirement of commercial banks was reduced to 25% from 30% of their total demand and time liabilities.

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