The Bank of Maldives has announced immediate changes to its card limits for foreign transactions, citing an increase in foreign currency spending and a lack of foreign currency sales to the bank.

As of Sunday, the bank has suspended foreign transaction allowances for existing and new debit and credit cards linked to Maldivian rufiyaa (MVR) accounts. Additionally, the monthly foreign transaction limit for existing Standard and Gold credit cards has been reduced to USD 100.

Karl Stumke, CEO and Managing Director of the Bank of Maldives, explained the rationale behind the changes. “The Bank has been monitoring card usage over the past year, and I have reiterated in numerous speeches and interviews that the Bank can only sell what it has been able to purchase,” he said.

Stumke highlighted the imbalance between foreign currency acquisition and spending, noting, “This year, we have purchased approximately USD 60 million in foreign currency from our customers, but card usage is threefold higher than that. The card usage impacts our ability to provide foreign currency support to our business customers, 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. We have to get the mix correct and ensure we are not squandering a scarce resource.”

Customers with USD credit cards or debit cards linked to USD accounts will not be affected by these changes and can continue using their cards up to the available account balance. Stumke encouraged customers with recurring international payments to set their debit cards’ primary account to USD to facilitate overseas purchases. He also noted that opening a USD account with the bank is a simple process that can be completed online without visiting a branch.

“We understand that the changes announced today will have a significant impact on our customers. We do expect this to be a temporary change and we will review this from time to time and keep our customers informed of any changes,” Stumke added. “We have not taken this decision lightly but have been compelled to take action to ensure we can continue to provide the necessary support for essential economic activities.”

The Bank of Maldives’ decision comes amid ongoing concerns about foreign currency availability in the Maldives and its impact on the broader economy.