News Desk
The Maldives government and Bank of Maldives are tightening controls on how much foreign currency people can spend abroad. The pressure is coming from several directions at once: rising import bills, a tourism slowdown, and a debt repayment cycle that has drained reserves faster than they can be rebuilt. India has since moved in a similar direction, but the Maldives got there first.
Officials frame the new rules as a way to distribute scarce dollars more fairly across households, students, businesses and the state. They also want to reduce how much the country depends on the dollar, pushing yuan and rupee transactions as alternatives.
Tourism drives almost everything here. It accounts for roughly a third of GDP and generates well over half of the country’s foreign exchange. Resorts and guesthouses collect dollars or currencies that convert to dollars. The country then spends those same dollars importing nearly all its food, fuel and consumer goods.
When tourism slows, the whole system tightens. And right now it is slowing badly. Arrivals dropped 15 to 20 percent in March and April compared to the same months last year, according to data from the National Hotels and Guest Houses Association of Maldives and the Maldives Association of Travel Agents and Tour Operators. The Middle East conflict knocked out transit routes through Dubai and Doha that European tourists rely on to reach Male’.
Daily arrivals that used to run around 7,000 fell to somewhere between 4,000 and 5,000. Industry groups put the losses above $500 million since March. On May 11, President Muizzu said a Cabinet committee is looking at what the government can do, but no specific measures have been announced.
On top of that, Maldivians are spending more online. Cards and digital platforms are now used to pay for education, healthcare, subscriptions and overseas shopping. Each of those transactions pulls from the same dollar pool the state needs for fuel imports and debt service.
BML’s chief executive Mohamed Shareef said net foreign currency inflows fell by $100 million over the four months to May 2026 against the same period last year.
The numbers tell you why the bank acted. Overseas card transactions through ATMs, point-of-sale terminals and e-commerce reached $524 million in 2025, up $200 million from the year before. In January 2026 alone, customers ran up roughly $60 million in overseas transactions.
The bank had also identified a specific abuse: people sending their cards abroad for others to use and tap into their foreign spending limits. To stop that, BML built a live integration with Maldives Immigration. Foreign spending limits on ATM and point-of-sale transactions now only switch on when the cardholder is physically outside the country.
There is also a new cap of 30 online transactions per month per customer. Hit that ceiling and the card stops working for overseas purchases, regardless of how much dollar limit is left. Daily quotas have been added for platforms like Temu.
Students studying abroad get a separate card with a limit of up to $1,200 a month. Previously many relied on parents sending cards from home, which is no longer possible under the new system. The transition period for issuing the new student cards is up to three months.
The broader debit card limit was raised to $1,000 a month at overseas point-of-sale terminals in November 2025, double what it was before, with an additional $3,000 allowance for airline tickets, hotel bookings and medical payments abroad.
The government is also pushing yuan accounts and UnionPay cards through BML, along with expanded rupee services. The idea is to route more trade through currencies the Maldives actually uses with its main partners, rather than converting everything through dollars.
The Maldives had a $500 million Sukuk maturing on 8 April 2026. A year ago, default looked like a real possibility. Credit rating agencies had downgraded the country. Bond prices had collapsed. The government settled it, paying $524.68 million in total including profit, drawing on the Sovereign Development Fund and official reserves.
By May 11, President Muizzu said the government had cleared $974 million in total obligations over 40 days, including currency swaps and a final $50 million instalment on a 2019 India loan.
He called it freeing the country from a debt trap. That may be true in a narrow sense. But paying off debt by drawing down reserves leaves you with less cushion, not more. The foreign currency that left to settle those obligations is not sitting in the system anymore. That is part of why card limits are tighter now. The state is trying to slow outflows while it rebuilds a reserve position that took a significant hit.
For most Maldivians, the changes mean more friction. Checking limits before travel, carrying documentation for medical or education payments, shifting business transactions away from personal cards. Not catastrophic, but noticeable.
The harder question is whether any of this is enough. Tourism is not recovering on its own timeline. The Middle East conflict shows no sign of ending soon. If arrivals stay depressed through the second half of 2026, the government will face pressure on reserves again, with fewer easy options than it had before the Sukuk was due.
India’s situation offers some context without offering much comfort. Rising outbound travel and heavier card use have pushed Indian authorities to tighten the Liberalised Remittance Scheme and add a tax on certain foreign spending. The logic is the same: protect the currency without blocking legitimate needs. Neither country has found a clean answer yet.
