The Bank of Maldives has introduced a new system to sell US dollars to Maldivians travelling overseas after the central bank temporarily took over dollar sales amid a shortage that led to soaring rates on the black market.
From January 8 onward, travellers can buy up to US$500 dollars per ticket through an online portal or at any BML branch. But the dollars must be collected from a dedicated area at the Velana International Airport after checking in at the departure terminal.
“The new system will ensure that only genuine travellers can obtain dollars, which will of course lead to a larger supply of dollars being made available for people travelling overseas for medical or work purposes, or even on holiday,” said BML CEO and Managing Director Andrew Healy.
In August, the Maldives Monetary Authority had instructed banks to sell dollars only to ticket-holders after reports that the special dispensation was being misused for sale in the black market.
Then in November, the central bank took over dollar sales citing difficulties faced by banks to meet high demand during the school holiday season. The move came after hundreds queued for hours outside the only BML branch in Malé that sold dollars and reports of queue token numbers being sold for up to MVR500 (US$32).
The MMA will continue to sell dollars until January 9 “to ease the transition to the new BML system.”
Healy added: “MMA has been providing an excellent dollar sales service to travellers over recent weeks and it will be important that we can match the standard of this service.
“We believe we can do so through removing the need for visiting a branch or queuing with our new online booking system and collection area at Velana International Airport. Dollars can now be booked easily through our online portal and they will be ready for collection at the airport before you fly.”
Despite the MMA taking over dollar sales in Malé, BML branches in the atolls continued to sell dollars to travellers. According to the national bank, passengers travelling from other international airports in the country will still be able to buy and pick up dollars from the BML branch located closest to the airport.
Under the new system, travellers using VIA must log in to the new online portal on the BML website, enter the identity and flight details of all travelling passengers, and complete payment using a BML debit card.
An individual can buy dollars for a maximum of five tickets.
To collect the dollars, travel documents must be presented at the BML collection area opposite departure gate four.
Prior to commencing direct sales to the public, the MMA provided US$4.3 million per week to commercial banks based in the capital. On its first day of selling dollars, the MMA served 535 customers, selling more than US$800,000 for 1,629 tickets.
However, the number of travellers buying dollars from the central bank has steadily declined in recent weeks, falling to 168 customers with 313 tickets on Wednesday.
The persisting dollar shortage has meanwhile been blamed on the underperformance of the tourism industry as well as government spending outstripping its revenue in the past ten years, forcing the government to borrow to plug the fiscal deficit.
The Maldives has a de facto fixed exchange rate of MVR15.42 per dollar. But the black market rate reportedly rose above MVR17.50 in late 2016, leaving local businesses scrambling to purchase enough dollars to pay for necessary imports.
The MMA’s use of the foreign currency reserve in mid-November to buy a US$140 million bond from the state-owned airport company to compensate Indian developer GMR meanwhile fuelled speculation that the Maldivian Rufiyaa could be devalued.
But the central bank insisted that there was “no additional pressure to the foreign exchange market” despite dipping into the international reserve.