The State Bank of India’s branch in Maldives has set a new monthly card limit for foreign transactions, at USD 100.

According to an email addressed to customers of the bank, SBI revealed that no more than USD 100 may be used from the bank’s cards in foreign countries in one-month, effective December 29, 2020.

SBI earlier set the USD transaction limit at USD 250, last year.

This is a measure being taken by a number of banks including the Bank of Maldives, due to plunging numbers of USD entering banks amid the Covid-19 pandemic.

As such, the country’s national bank revealed that the amount of USD leaving the bank had been snowballing due to online trading transactions, and placed a new limit of USD 250 per month for debit and credit cards for use on foreign transactions, to ease the hard-hit local economy, as a temporary measure to manage within the ever-changing situation surrounding Covid-19. This measure was introduced in September 2020.

Although the ongoing pandemic has increased the USD rate to as much as MVR 19 in the black market in the beginning, the rates began decreasing within the last week and USD rate was between MVR 17-18 on Sunday.

This was mainly caused due to the country’s tourism industry having come to a complete standstill following border closure. However, tourism has been recovering gradually since borders were reopened, but the dollar issue remains far from being improved.

Maldives economy was hit hard by the Covid-19 pandemic even before the first few cases surfaced in the country during March. While tourism is the largest source of USD into the country, income flow had come to a halt after the country’s tourism industry shut down for months. Maldives reopened borders for international travel on July 15.