BML increases dollar allocations for TTs following MMA move

Bank of Maldives (BML) has decided to increase its US dollar allocations for Telegraphic Transfers (TTs) for three weeks following a move by the Maldives Monetary Authority (MMA) to increase foreign currency allocations to banks.

BML announced the decision on Wednesday, saying the amount allocated for TTs would be increased based on the bank’s dollar inflows and the volume of transfer requests received during the period.

The bank did not disclose the amount by which its TT allocation would increase.

According to BML, it provided more than USD 186 million for TT transactions between January and the end of July this year.

This represents an average of about USD 27 million per month, an increase of USD 12 million from the monthly average recorded last year.

BML said it had provided about USD 570 million in foreign currency for customer requirements during the first seven months of the year, averaging USD 2.7 million per day.

“We take this opportunity to reassure individuals and businesses that the bank remains committed to providing the foreign currency required for their diverse needs. One of the bank’s fundamental responsibilities is to sustainably balance customer demands with the bank’s foreign exchange position,” BML said.

The announcement follows the MMA’s decision on Tuesday to increase weekly US dollar allocations to banks by 51 per cent for three weeks.

The central bank said the measure is intended to increase access to foreign currency through the banking system and assist businesses facing difficulties in obtaining dollars for imports.

The measures come as the cost of acquiring US dollars outside the banking system has risen, placing pressure on businesses that depend on foreign currency for imports and other payments.

The MMA has also announced a series of changes to its foreign exchange framework.

Amendments to the Foreign Exchange Act introduced by the government would remove the option allowing resorts to convert USD 500 per tourist arrival instead of surrendering a share of their foreign currency earnings.

Under the proposed changes, resorts would be required to convert 20 per cent of their total foreign currency revenue through the domestic banking system.

The measures are part of efforts by the central bank to increase the amount of foreign currency entering the banking system and address demand for US dollars outside regulated channels.