Maldives Must Reform Financial Regulations to Move Towards Single-Currency Economy: Firaq

The Maldives must modernise its financial regulations and move towards a single-currency economy to address structural imbalances in the financial system, Inner Maldives Founder and CEO Mohamed Firaq has said.

Speaking on the Economic Ministry’s programme Two Sides of the Economy, Firaq said the country’s existing dual-currency system had evolved in what he described as an “archaic” manner and was no longer suited to the needs of a rapidly expanding economy.

Inner Maldives, founded by Firaq, is one of the country’s leading travel agencies and tour operators. The company also serves as a passenger sales agent and represents and manages airline operations in the Maldives. Firaq is also a frequent commentator on economic and other national issues, particularly on social media.

Firaq said the widespread use of two currencies across different segments of the economy had created a significant imbalance. While much of the resort sector operates in US dollars, he noted that most everyday domestic transactions are conducted in Maldivian Rufiyaa.

He identified the outflow of foreign currency through remittances as one of the key challenges facing the economy. According to Firaq, the salaries and other earnings of approximately 280,000 expatriate workers in the Maldives are frequently converted into US dollars and remitted overseas each month.

“Our monetary policy needs to modernise. This does not mean changing laws in a way that poses a threat to investors in the Maldives. However, we need to mature and migrate towards a single-currency economy,” Firaq said.

He also raised concerns over the large volume of cash withdrawn from ATMs across the country, arguing that such withdrawals are not driven solely by the spending needs of Maldivians. He said multiple channels contribute to money moving outside the formal financial system and, ultimately, out of the country.

Firaq further pointed to foreign individuals and entities allegedly operating businesses illegally in the Maldives, saying the scale of the issue had grown to a point where it was becoming increasingly difficult to regulate effectively.

He said financial transactions should be consolidated within a more unified and closely regulated system to improve oversight, retain more money within the domestic economy and ensure that funds circulate through established financial channels.

Firaq also argued that the country’s laws and financial regulations had not kept pace with the growth and increasing complexity of the Maldivian economy.

He called for a comprehensive review of the existing monetary and regulatory framework, stressing that modernising the country’s financial system had become an urgent economic priority.