The Bank of Maldives has changed the limit on dollars provided to Maldivians studying overseas in a bid to alleviate the financial burden caused by selling dollars in excess of the amount that it is able to buy.
Instead of the USD 1,000 a month previously sold as a "stipend" to each student pursuing higher education abroad, the bank decided to provide an amount determined by the Ministry of Higher Education.
The bank has sent details of the change in an email to students. A bank official has confirmed this to Adhadhu.
Monthly stipends set by the ministry for countries with most Maldivian students
- Malaysia: RM 1,960 (about USD 415)
- India: USD 440
- Nepal: USD 415
- Philippines: USD 450
- Russia: USD 615
With this change, the amount of dollars sold per month to most students will be down by half.
In the past year, BML sold USD 333 million in excess of the amount that it was able to purchase from customers and the Maldives Monetary Authority (MMA).
However, as it would not be sustainable to continue selling something that is unavailable for the bank to buy, CEO Karl Stumke previously said that difficult decisions would have to be made in order to reduce exposure to risks and improve the bank's financial situation.
In December, the government pledged to raise the dollar withdrawal limit to USD 1,200 a month for Maldivian students overseas but failed to do so.
Scrapping the dollar limit set by banks was a campaign pledge of President Dr. Mohamed Muizzu.
The sale of dollars in the black market is a longstanding problem that has remained unresolved for several years. Although the official exchange rate is MVR 15.42 per dollar, the price of dollars in the black market is above MVR 18 per dollar.
One reason that the MMA faces criticism over the issue is the participation in the black market of money exchangers licensed by the authority. The central bank has so far failed to take appropriate measures to stop the practice despite the black market being out in the open.
