Expatriates holding local accounts with the Bank of Maldives (BML) will be prevented from spending money overseas using their debit cards, as the dollar shortage worsens.
A statement from the BML, written in Dhivehi, stated that from November 1 foreigners with debit cards will be unable to conduct transactions of any amount from either the ATMs of other banks or point-of-sale machines in shops.
At the same time, the overseas spending limit for Maldivians has risen from US$200 a day to US$600.
The move, blamed by BML on the worsening dollar crisis, will particularly impact the many foreign teachers and other professionals such as doctors working in the country who bank locally, particularly those based outside Male’ who need to send money home.
One such doctor explains on his personal blog that it is common practice for foreign doctors to transfer money home by opening a BML account at a branch in the atoll capital, and then give an international visa debit card to relatives in his/her home country.
“Now no one has any idea about how to send money to their country without visiting Male’,” he writes. “If you keep the money with you, there is no guarantee that you will not be robbed of it.”
“The gynecologist of our hospital was robbed after he got his salary three months back. The next day, someone opened the house with a [spare] key and cut open the suitcase where he kept his money.”
In August an Indian pediatrician working at Kudahuvadhoo Hospital in Dhaal Atoll was stabbed in his home by a group of masked men.
The attack occurred on 10 minutes after the doctor arrived home from the hospital, when the group forced in his door. The doctor was stabbed in the arm and leg when he was unable to give the men any money.
Moreover, after October 15, BML will only allow foreigners to transact overseas from a US dollar account.
“Debit card for rufiya accounts can only be issued to foreigners for ‘local’ use at the the Bank of Maldives ATMs and POS terminals,” the announcement reads.
Several foreign commodity importers based in the Maldives also warned that their businesses were under threat after local banks began refusing to trade freely in rufiya.
“Our overseas suppliers have to be paid in dollars, and local buyers pay us in rufiya. Our bank has now stopped allowing us to transfer this into our US dollar account,” the manager of one enterprise told Minivan News recently. “How are you meant to run a business in this place? Surely they can’t go on like this?”
Press Secretary for the President Mohamed Zuhair told Minivan News that the end of the off-peak tourist season had combined with “a concurrence of other factors” to exacerbate the foreign currency crisis.
“There are currently two groups of people who need dollars – the first is the group of pilgrims about to go on the Hajj – the whole exercise usually costs US$30 million. Unfortunately it’s also the school holidays, and many teachers going on holiday will also need the money. That’s why there’s going to be shortages,” he said.
He acknowledged that the dollar situation was affecting investor confidence and making the Maldives a less appealing destination in which to conduct business.
“Foreigners can bank with foreign banks such as the State Bank of India,” he noted. “We also have a commitment from [Indian infrastructure giant] GMR that they will pay their first down payment on Male’ International Airport by the end of November – it was initially the end of December. Income from the donor conference should also reach US$90 million by the end of the year,” he said.
“It’s just unfortunate that the Hajj is slightly ahead of these debts. [Investor] confidence is a big problem, and the government is talking to the Maldives Monetary Authority. But there are no quick fixes.”
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Comment: It’s the economy stupid!
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We survived 30 years under "dictator" Gayoom and never faced such mismanagement. Don't know where we will end up if we have this lot in government for another two years. Bringing President Nasheed and his dumb ministers to power is the silliest thing we Maldivians did recently.
This is utterly absurd. When my friends say "Dhooni Rajje" I never believe them before. But I now realize that they are right. There are bunch of MDP morons out there who believe what these stupid dirty politicians say. Isn't it really embarrassing to enforce such laws to solely to expatriate? Isn't it an open daylight discrimination or being xenophobic? We need a good composition of educated expatriates in our work force instead of poor villagers from neighboring countries. And to do that we need to treat them fairly.
I asked Mr.President to step down instead of doing all his daily magic in the media. We do not want to have that bitter "medicine" anymore to go to "Anneh Dhivehi Rajje".
Couple of questions
to Ministry of Tourism
Did you take the rents of the resorts payable to the Government in US Dollars?
Another to the Monetary Authority
What happens to the donors money that comes in dollars?
To Immigration
Are the salaries of the foreign workers agreed to be paid in US Dollars in their contracts?
To Human Rights Commission
Do the humans rights of foreign workers in the country fit into the mandate of your Commission or are you only observing what is allowed within the Maldivian Constitution?
And ultimately to the employers
Are you paying the foreign worker you employ regularly?
And if so
To the Government of Maldives
Can Monetary Authority control their accounts?
Its obvious that MMA student governor Fazeel Najeeb is a puppet of Yameen Abdul Gayoom (the devil brother of Gayoom)! and also Governor has no knowledge of how to run a central bank! And on top of that MDP government hads over BML board to some lunatics who has nothing but personal interest! Alhan Fahmy's brother and few top elite Male' class family members were appointed to get them blessed! While on the shareholders side, Thasmeen's agent Mohamed Ahmed (andey) sits in the board to protect old regime interest!! Shame!! Shame!! its all for the rich and class! Ordinary Maldivians going for medicial, students studying abroad ...etc gets rejected by BML and all rich gets their dollar!! BML needs to go down! Specially its top corrupt management!!
@Andy a synonym would be "Banana Republic".
@Andy & Ismail.
I don't think i would discount any blame of this from previous Maumoon regime this is after all the after effects of overprinting Ruffia and our budget deficit was over 30% even then. neither would i put Anni on a pedestal, Anni should have come up with drastic economic changes and should have applied financially minimalistic governing model.
How about a shift yo Euros.?
This is the result of 30 years of mismanagement by Gayyoom! Go on, bring him in now, if you think he can solve all these problems. You think Gayyoom has the power to print dollars? Morons!
Student Governer should be sacked immediately. Why is he keeping rufiyaa tied to dollar without a way to finance the trade deficit.. Also it is reducing the banks ability to take care of their customers... In spite of his fat salary and independence, he is playing politics by not doing anything.. With the way the inflation is rising now, soon there would be riots. Besides, is there any country that stops you taking your own money in the bank besides North Korea..
BML has gone nuts. I wonder where are there brains to enforce such laws. And why is this dollar crisis in only Maldives. Im in europe and Im not hearing any dollar crisis here. Banks in even small villages here are issuing visa debit cards which can be used all over the world. Just hpw are those poor foreigners who are serving our country going to send money to their loved ones? Has the Anni gang not thought about all the outcomes seriously before making such laws at their wine table.
This is a good move by the bank, Maldives being a very small country (actually the smallest country in the region) needs to protect itself from going bankrupt... By allowing forigners who are paid in MRF to withdraw in USD or any other currency is just insane...and frankly the bank was stupid to tie the forign issue to this very practical issue... ie they should have made it impossible for people who have MRF accounts to deal in other currencies.... lets take the example ...in Maldives almost all major currencies including (the ruppes from neighbours) are accepted...but the same recognition is not given to MRF... so unless we can actually go to Lanka or India and change our MRF to thier Rupees why should Maldives become bankrupt because rich forigners drain the dollars out of maldives !!!
With a bumper tourism season and after selling off a major chunk of our public assets (dhiraagu, airport etc)to foreigners we the public are in worse situation under MDP than ever before. After Gayoom now pilgrims are to blame for all our woes. Hehe! There were times when more pilgrims than this year went to Haj.
I guess its time that we control the sending of money out of the country. We should find out the actual pay for teachers and doctors and should only allow what they earn to be send out of the country. However it is found that most teachers earn more than their pay through private tuition services to students which should be made illegal. Similarly foreign doctors work in private clinics in spite of the pay they get from government hospitals and health centers. Such malpractices hog up lot of foreign currency which should stay in the country. Teachers and doctors who want to do private tuition service and private practice should leave their job if they want to be in private practice. We can only control foreign currency leakage by monitoring money laundering in the country and allowing only the amount of pay entitled to foreigners to be taken out of country. Now we have a fury of leakage of dollars as we don't control money laundering. I know some foreign countries which have strict rules on money laundering. For a small country with a crippled economy, which heavily depends on foreign labor such control is vital.
I agree with Aminath comments Aminath on Tue, 19th Oct 2010 11:32 PM.
Expatriates are suffering with mental stress now how they can transfer their money to India or Bangladesh, i request the government to pay the salaries and allowances only in dollars not in Rufiya
what astupid discrimination policies what do you want people have been brought here leagally and you are not allowing them to send mony back home if so dont bring teachers and doctors send our doctors to atools let them work there
so what is best?economic stability during dictatorship or poverty and chaos during democracy?do you like to have a breakfast every day or only promise about happy future?
@Adam on Wed, 20th Oct 2010 8:19 AM
and
@ibrahim Mohamed on Wed, 20th Oct 2010 9:30 AM
What an utter ignorant economic nonsense!
@Adam
"By allowing forigners who are paid in MRF to withdraw in USD or any other currency is just insane"
What you are suggesting is that we pay the foreigners in our own printed MRF (which is useless to anyone outside of this country btw), and STOP them from converting it to goods and services via an intermediate currency. The only reason a paper currency is valuable is people accept it for exchange. So if you deny them the convertibility, you are denying them their hard earned wages (because they are foreigners)!! The only one insane here is you.
ibrahim mohamed:
If you don't want them to earn by private practice, government could always sign a contract with them that states as such. No need to make it illegal (meaning applying the same broad stroke to everyone).
You say:
"...allowing only the amount of pay entitled to foreigners to be taken out ..."
Who determines this 'entitled' amount? If they are earning that money by providing a services of which they public is willingly paying, then the public is saying they are entitled to that money. It is not you, me or the government who determines what someone is entitled to earn, as long as they earn it with honest work.
"...strict rules on money laundering..."
Do you even know what money laundering is? Are you suggesting that the foreigners who earn and work here, who are only seeking to exchanged mrf to goods and services are money laundering?
"...which heavily depends on foreign labor such control is vital..."
We depend on foreign labour, but we should have policies that discourages them from coming. Nice logic!
--
Why only foreigners? By what logic is BML targeting them? There will always be a scapegoat, usually the foreign workers here. Social problems? blame foreigners. Currency problem? blame foreigners. Economic problem? blame foreigners!!
The problem is very simple. Just like any other good, high demands raises the market price. Whether you look at clothing, food, housing, oil, services etc. The same is true for currency. High demand for USD has raised the real market value of dollar relative to the MRF, or MRF value has dropped due to inflation. So by putting a price control on currency, you create a shortage. No amount of rationing, or harsh penalties on foreigners/locals will solve the problem (unless you want to confiscate their earnings). Let go of the currency peg, or atleast devalue MRF to a value more near to market price. Blackmarkets are created precisely because of aggressive price controls, whether on currency or any other good. Economic history witnesses this fact.
Even now, in black market, people do obtain USD in thousands, at the black market price.
Well, to issue a debit card under the international brands of visa and mastercard and then refuse international service to some of the users, BML in it's queer idea of international banking standards renders itself well outside of normal or I suspect legal practice.
It is useful, when a bank plays dictator, to always look at who exactly benefits from their dodgy practices. Who exactly is being allowed to withdraw large amounts of US dollars to sell on the black market to those that cannot buy for themselves, now who might that be?
Secondly, Maldives has to start asking itself what the effect of a mass exodus of foreign workers away from this country would do to both the private sector in particular and the economy in general, my guess is meltdown.
Anyone affected by the draconian ideals of BML should simply become a consumer for real and remove most monies from their account and open another account with one of the proper banks available in Male'.
@Ahmed (fifth comment). If we bring Gayoom in now he would probably solve this mess as he did for 30 years.
You should move in with times, it is Pilgrims who are to blame for this mess now not Gayoom.
Ah! some of you stupid maldivians.
First of all you fishermen dont have the brains to do the right thing. Thankfully "Golaboh" Gayoom had the brains to bring in foreign doctors and teachers to train maldivians and improve their intelligence.
Secondly, Bangladeshi workers were brought in becasue maldvians dont work hard themselves.
The maldivians are only interested in drugs, hakuru, sex, marriage, divorce, pornography, anal sex and abominations AND TO TOP IT ALL FINALLY SAY THAT THEY ARE MUSLIM DHO!
Why do our people not realize that we need foreigners to work for us? They are the ones who are helping us improve. We must appreciate them by paying them well and treating them with dignity.
I studied in Male' and had many foreign teachers who trained me. they were very concerned about all of us. But we people! when we grow up we dont even regard and respect them. Shame on you people. When I went lanka for studies, i realized how people look down upon me only because i was a maldivian. I then realized how wrong we were in what we did. i changed...
Why does BML bring out stupid policies. Let us suffer for these incongruities. Don't torture the foreigners. How do you expect them to be happy and serve us if we keep troubling them? Why have different standards for Maldivians and foreigners?
Just imagine - doctors and teachers are getting robbed - but government does not pay their expenses for treatment. But when a maldivian hakuru thief gets injured he gets free treatment and even gets free foreign treatment.
I am working in IGMH and let me tell you, when a thief had a head injury he was sent to Lanka - ALL EXPENSES PAID BY THE POLICE - only because he was arrested after he fell down while robbing and hurt his head.
What outrageous things are these?
That shows that we are appreciating and encouraging the maldivian hakuru culture and torturing the foreigners who come to serve us.
Shame to Anni - the ganja boh and all hakuru maldivians.
praise to Gayoom - sorry i did not vote for you. My one vote would have made you stronger. I was stupid to vote for ganja bo thinking that we would have a better life. Sorry Gayoom be.
Shame on ganja bo, flat be, faddah bo Anni.
I'm... confused.
What dollar shortage?. Can't these morons earn dollars instead of having to mooch off international aid?
@ Ibrahim. So you mean working extra time and earning is money laundering? Can you give any reference to that?
Missed one point. Reliable sources confirm that fazeel is willing to devalue the rufiyaa. If done, that will be a political blow for anni. People are waiting to buy dollar for 10rf. Including me. Another false promise.
May I remind everyone of the dollar shortage in 2000 and the black market rate of the dollar hit a blasting 15.50 or more?
@Aminath. Yeah, we all know that. But no one promised us that we can buy dollars for 10rf at that time. And I don't want to talk of other promises. Most of us know what happened during past 3 or 4 decades and know whats going on now. And its hard for people to accept when MDP justifies their failure based on the 30 year thing.
They should have actually waited for someone else who is capable to rule the country and clean the shit for few years. And once the sea is calm MDP can come back and start learning how to ride the boat. In the existing scenario, by the time MDP learns their lessons a nation with 300,00 humans might end at a shore that is not the desired one. And the rest would be history and no returning back.
Its like a wrong ruling party at a wrong time and in the wrong country under the wrong circumstances.
just wait until the whole system collapses under its weight.. i love this crisis and hope it gets worse. unfortunately it takes suffering and absolute destitute for people to think out of the box and seak other alternatives..
Acceptable move. It is time BOM understanding loopholes in Banking. Indians all over the world always find one way to wire out monies and by the time authorities realize, millions would have been lost.
Introduce further taxing on foreign salaries as this where the raw Maldivian foreign reserve is depleted at Zero benefits!!
Good work BOM