USD issued for medical purposes triples in a year raising concerns over misuse

The limit on US dollars allocated to Maldivians travelling overseas for medical treatment was increased on August 1. Since then, the Maldives Monetary Authority (MMA) has been supplying foreign currency through the Bank of Maldives (BML) and Maldives Islamic Bank (MIB) for more than a year to ease the dollar shortage faced by citizens seeking medical care abroad.

Despite these measures, recent MMA statistics indicate a sharp increase in the volume of dollars sold for medical purposes within a single year. The figure has nearly tripled, raising concerns over the reasons behind the surge and whether the funds are being used for their intended purpose.

Amid growing demand for foreign currency, BML and MIB introduced a policy on August 1, 2023, allocating USD 2,000 per patient travelling abroad for treatment under the Aasandha scheme. Patients receiving assistance from the National Social Protection Agency (NSPA) were eligible for an amount determined by the agency, capped at USD 2,000. Meanwhile, those financing their medical treatment independently, without assistance from Aasandha or NSPA, were eligible for USD 1,000. The foreign currency is supplied to BML by the MMA.

According to data released by the MMA, a total of USD 18.51 million was sold for medical travel under Aasandha and for privately funded treatment abroad during the previous year. However, the amount had risen significantly by the end of September this year, with USD 41.1 million sold for medical purposes during the period, nearly three times the amount recorded during the corresponding period last year.

The data further shows that a substantial share of the total was allocated to Maldivians travelling abroad for medical treatment at their own expense. By the end of September this year, USD 29.2 million had been sold to private medical travelers.

The sharp increase within such a short period has raised questions about whether the dollars are being used exclusively to cover genuine healthcare expenses or are being obtained for other, unauthorized purposes.

Identifying the factors behind the sudden and substantial rise in demand for medical-related foreign currency is therefore essential. Although banks increased the allocation available to eligible travelers, further scrutiny is needed to determine whether the surge reflects legitimate medical expenses or possible misuse of the system.

In light of concerns over the use of such substantial amounts of foreign currency, strengthening existing monitoring and oversight mechanisms is crucial. Preventing the unauthorized use of dollars is essential to limiting the economic impact and safeguarding national reserves. Ensuring that foreign currency reaches those with genuine medical needs while maintaining the stability of the country's foreign exchange reserves remains a pressing priority.