The administration’s decision to increase the per month US Dollar (USD) withdrawal limits for students, with Bank of Maldives (BML) accounts, studying abroad to US$1,200 will not be implemented starting tomorrow due to the USD shortage, the Ministry of Finance has admitted.
While the change will not be possible at this time, BML, the Maldives Monetary Authority (MMA) and the Ministry of Higher Education, Labour and Skills Development are, however, working together to develop a system to implement the policy, the Ministry of Finance said in a statement. No additional timelines were provided.
“There are currently difficulties in implementing this policy and we are identifying the current USD demand and constraints in the country,” the statement read.
The Ministry of Finance added that as part of the process, a complete registry of students abroad was also being compiled, and simultaneously, the ministry, along with the MMA and the banks, is working to increase official reserves and the portion of USD drawn into the official banking system.
Meanwhile, sources at BML stated that the USD shortage cannot be resolved until the parallel markets are addressed, placing the responsibility solely on the regulators and legislators.
BML suspended providing USD support to traders sending telegraphic transfers abroad at the beginning of January amid heightened friction between the bank and the administration. Observers point to the administration’s requirement to raise the USD limit as the source of the friction. Subsequently, the bank’s chairman and several board members were sacked, only to have the administration walk back the decision and reinstate some to the board.
