The Maldives Monetary Authority (MMA) has stated the recent reversal of US dollar transaction limits by the Bank of Maldives (BML) was necessary, as the changes would not have had a positive long-term impact on the lives of residents and businesses.
In a statement, the MMA acknowledged while BML faced challenges in managing card payments, the bank’s overall financial performance remains strong. The MMA reported that extensive discussions were held with BML to explore potential solutions for managing overseas transactions using BML cards.
According to the MMA, BML has experienced a significant increase in card usage for foreign transactions since the COVID-19 pandemic. The MMA noted that the increase in money printing during the previous administration contributed to higher liquidity of the local currency within the banking system, with BML’s average surplus liquidity reaching USD 434 million as of July. Personal loans issued by the bank also grew substantially, rising from USD 188 million at the end of 2019 to USD 428 million by the end of June 2023.
The MMA highlighted the supply of dollars to banks has been steadily increasing over the years. In 2022, USD 267 million was sold to banks, and this amount rose to USD 307 million by the end of the previous year. The MMA also noted that a significant portion of this year’s dollar allocation has been directed to BML.
Emphasising that other banks besides BML also offer foreign transactions via debit card, the MMA affirmed its commitment to prioritizing the needs of residents when determining the rate at which dollars are issued to banks. Additionally, the MMA underscored the government’s efforts to address the country’s financial challenges sustainably and mentioned that the implementation of the Foreign Investment Bill is expected to further improve the financial situation.