After the Bank of Maldives (BML) on Sunday announced its decision to suspend foreign transactions for debit cards linked to MVR accounts and a monthly transactional limit of USD 100 for standard and gold credit cards, the exchange rate of USD has significantly lifted in the black market.
Days leading up to the bank’s Sunday decision, the USD dollar exchange rate has observed gradual increase in the black market climbing to an average of MVR 18.00-18.20. However, hot in the heels of the bank’s decision, USD exchange rate in the local black market has lifted between MVR 18.50 and MVR 18.85.
Some frequent currency exchangers report that this rate could surge between MVR 20 and MVR 22 rates, as was previously observed during the Covid-19 pandemic.
The bank in its Sunday statement said that it was suspending allowance for foreign transactions for existing and new debits cards and new credit cards linked to MVR accounts.
Additionally, for existing Standard and Gold credit cards, BML has placed a monthly limit of USD 100.
The bank “can only sell what it has been able to purchase” said Karl Stumke, the CEO and Managing Director of BML, who noted the bank purchased an approximate of USD 60 million from customers in 2024, but the card usage is threefold higher than this figure.
“… and we have this anomaly where the Bank provides 75% less foreign currency to the economic sector than we do for discretionary spend on cards dominated by travel and online shopping,” Stumke said.
He added that the bank needed to the “mix correct” to ensure BML was not squandering a scarce resource.
Noting the bank’s obligation to protect its depositors, Stumke stressed that BML cannot continue to sell more than what the bank was purchasing.
“Customers using their USD credit cards and/or debit cards linked to USD accounts are unaffected and are free to use up to the available account balance. Customers that have recurring international payments are recommended to have USD accounts as their debit cards’ primary account to process overseas purchases,” Stumke added.
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