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.”