Bank of Ceylon stops MVR-to-USD conversion for remit transfers
The change took effect on Tuesday, according to a notice sent by the bank to customers.
Bank of Ceylon (BOC) has stopped converting Maldivian rufiyaa into US dollars for overseas transfers made through its Smart Remit service, citing a shortage of US dollars in the Maldives.
The change took effect on Tuesday, according to a notice sent by the bank to customers.
Under the previous arrangement, customers using Smart Remit could deposit Maldivian rufiyaa with BOC to make remittances abroad, with the bank converting the funds into US dollars for the transfer.
Following the change, customers can no longer use rufiyaa for outbound remittances through the service.
In its notice, BOC said some customers receive salaries and allowances in both US dollars and Maldivian rufiyaa. Transfers through Smart Remit can continue where the required funds are available in US dollars.
BOC has not announced when rufiyaa-to-dollar conversion for Smart Remit transactions will resume.
The restriction comes as the Maldives continues to face a shortage of US dollars through the banking system.
The government and the Maldives Monetary Authority (MMA) have introduced measures aimed at increasing the amount of foreign currency entering banks.
Amendments to the Foreign Exchange Act that took effect on Tuesday require resorts to convert 40 per cent of their monthly foreign currency revenue through local banks. The previous revenue-based conversion requirement was 20 per cent.
Authorities have also increased enforcement against foreign currency trading outside channels authorised by the MMA.
Despite the measures, access to US dollars at the official exchange rate remains limited for individuals and businesses. Bank limits on foreign currency card transactions have also affected some overseas payments and online subscriptions.
