President Dr. Mohamed Muizzu has announced an increase in the foreign transaction limits for debit cards to USD 3,000.
This decision, aimed at easing international financial transactions for Maldivian citizens, comes amidst ongoing efforts to manage foreign exchange dynamics.
During his visit to Meemu atoll Muli, President Muizzu stated that effective November 11, coinciding with Bank of Maldives (BML)'s anniversary, the daily limit for debit card transactions at overseas Point-of-Sale (POS) terminals will be raised to USD 1,000.
Furthermore, from the same date, the limit for debit card payments for international airline tickets and hotel accommodations will be increased to USD 3,000. Significantly, debit card payments will also be facilitated for foreign hospitals starting November 11.
A key benefit of these debit card transactions is the ability to acquire U.S. dollars at the official exchange rate of MVR 15.42 per dollar.
A Bank of Maldives (BML) customer uses a debit card to withdraw cash from an ATM. (File Photo/Sun)
President Muizzu also highlighted BML's recent launch of the Chinese Yuan account service in the Maldives, marking a first for the nation. Recognizing the significant volume of business conducted by Maldivian entrepreneurs in Chinese currency, the President noted that the introduction of Yuan accounts is expected to enhance business outcomes.
He also announced that Union Pay debit and credit cards will be introduced for Chinese currency accounts from January 1, with the bank actively working on similar arrangements for Indian Rupees.
This latest adjustment follows a previous increase on June 30, when the foreign transaction limit for debit cards was raised from USD 250 to USD 500.
Last year, on August 25, BML reportedly lifted foreign transaction limits on MVR debit cards, a decision that was subsequently reversed following instructions from the Maldives Monetary Authority (MMA). This reversal was purportedly influenced by government intervention, citing a directive from President Muizzu, although official confirmation remains pending.
A customer makes payment using BML card. (Photo/BML)
The Maldivian economy continues to grapple with a persistent shortage of U.S. dollars, with the currency trading above MVR 20 on the black market for over three months, while BML maintains the official exchange rate of MVR 15.42.
To mitigate this foreign exchange crisis, the government, through the MMA, implemented a 2023 regulation mandating resorts to convert USD 500 per tourist into Maldivian Rufiyaa, with the aim of bolstering foreign reserves.
While the government anticipated a depreciation of the dollar's value due to these new regulations, its value has remained unchanged despite substantial Rufiyaa exchanges under these directives. Additionally, the MMA has decided to acquire 90 percent of the dollars converted at banks.
Consequently, commodity prices have risen as businesses and the public are compelled to procure U.S. dollars at higher parallel market rates.