The Bank of Maldives (BML) has decided to lower the limit for US dollar transactions on the bank’s debit and credit cards.
The current monthly limits for USD transaction via the national bank’s debit and credit cards are USD 250 and USD 750, respectively.
A source from BML confirmed the bank has decided to lower its card limits, and will make an official announcement, soon.
According to the source, the bank decided to make the decision due to a severe shortage of USD.
“The dollar situation is very bad. We have decided to lower the card limit if the situation does not improve,” said the source.
BML has yet to issue an official statement regarding the decision.
In December, the cabinet decided to raise the card limit on US dollar transaction for overseas Maldivian students, which is currently capped at USD 750 dollars per month, to USD 1,200.
A government spokesperson said the change would take effect on February 1.
But a day ahead of the deadline, the Finance Ministry issued a statement admitting to difficulties in implementing the change.
The ministry said it was engaged in discussions with the BML, the central bank, and the Higher Education Ministry, and was studying the demand for US dollars, and the challenges to implementing the government’s pledge.
According to the ministry, the government is also working on compiling an updated registry of overseas students, in order to ascertain that they directly benefit from raising the card limit.
The ministry said it is also working on boosting the country’s official reserves, and increasing the injection of US dollars into the banking system.
According to the government, the ultimate goal of the changes is to remove card limits on US dollar transactions, altogether.
The shortage in USD has pushed the exchange rate in the black market to above MVR 18. This has worsened inflation in the Maldives, which almost entirely dependent on imports.