All domestic transactions to be made in MVR

Maldives Monetary Authority tower | Photo: Sun

Malé, Maldives – Maldives Monetary Authority (MMA) has issued a notice to all banks operating in Maldives to stop card transactions made in USD within the country.

In the memo sent out by MMA to the banks, it states that all banks are required to stop USD transaction made with their VISA cards within the country from April 15, 2021 onward.

It also stated that all payments made to restaurants, guest houses and resorts should also be made in Maldivian Rufiyaa from then onward.

The central banks decision comes while a bill had been presented to the parliament to ensure USD income benefits the state and also while the government had announced plans for lowering the use of USD within the country amid the shortages of USD which has caused inflation within the country.

MP of Manadhoo Constituency Ahmed Haaroon had presented a bill to the parliament on February 17, 2021 requesting to find solutions to concerns as dollar income from businesses in Maldives are being deposited to foreign banks.

The bill presented by MP Haaroon noted the usage of foreign POS saying that the income from tourist bookings to Maldives are also being deposited to foreign banks. The bill stated that due to these issues, the rightful income to the government from these businesses are not received. 

According to MP Haaroon, while trade worth USD 4.1 billion took place in Maldives during the year 2019, there was no way to confirm exactly how much was received by the state and how much was deposited to foreign sources.

In a press conference held on February 11, 2021, Spokesperson of the Presidents Office, Mohamed Mabrook Azeez informed that the incumbent government was planning to bring several massive changes in order to lower the price of dollars in Maldives.

The statement from Mabrook comes after he was questioned whether the government has plans to de-dollarize the economy while he was speaking at a virtual press conference held on Wednesday. 

Mabrook avoided going into details regarding the question and answered that the government’s thinking is to introduce a structural reform to reduce the amount of shocks the economy of Maldives receives. He further informed that the de-dollarization is one of the mechanism to complete that task and that research is currently ongoing to make it possible. 

Mabrook stated that details regarding this matter would be revealed at a later time. However, he noted that massive changes need to be brought to the country and that they would begin the work within this year.