Bank of Maldives (BML) has announced that it may be forced to implement temporary measures as dollar outflows have begun to exceed inflows, driven by a downturn in the Maldives' tourism sector linked to the conflict in Iran.
In its first-quarter report, the bank noted that "net card inflows"—the foreign currency generated through card transactions—have declined due to a drop in tourist arrivals and reduced spending by those visiting the country. BML highlighted that card-based inflows have plummeted by approximately one-third so far this month.
Despite the reduction in inflows, BML’s statistics show a significant surge in the volume of dollars sold by the bank. During the first three months of this year, the bank provided USD 226 million to meet the needs of businesses and the general public.
BML reported that it has sold an average of USD 35.4 million per month in dollar support. Additionally, the bank facilitated an average of USD 40 million per month for debit and credit card transactions.
Compared to the first quarter of last year, the average monthly dollar sales for card transactions increased by 20 percent, while the amount provided for dollar support saw a staggering 142 percent increase.
BML First Quarter USD Statistics:
- Amount sold for debit and credit cards: $119.9 million
- Amount sold to businesses: $106.2 million
- Number of dollar T/Ts processed: 32,000
BML stated that the volume of outward remittances for imports and foreign services has doubled. The bank anticipates that, given the current economic climate, the disparity between outward remittances and incoming funds will widen significantly.
Despite the liquidity crunch, BML maintained that it is robustly managing its foreign exchange operations. However, the bank cautioned that if the current situation persists and the decline in dollar inflows worsens, temporary measures may become necessary.
"If the decline in foreign currency inflows continues to accelerate, the bank may have to take temporary measures to align sales proportionately. Nevertheless, the bank remains committed to providing uninterrupted foreign exchange support for the essential needs of businesses and individuals," BML stated.
While assuring that any potential actions would only be temporary, the bank emphasized that, to date, it has not denied any business request for dollar support via Telegraphic Transfer (TT).
BML made these remarks in response to an Adhadhu article.
Prominent local companies informed Adhadhu that the bank has notified them of the suspension of dollar support until the end of this month. But the bank denied the reports.
