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Wednesday 16 Apr 2025
LOCAL EDITION
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LOCAL EDITION
Maldives Monetary Authority (MMA) headquarters in Male' City. (Sun Photo/Fayaz Moosa)
Maldives’ official reserve declined by nearly five percent by the end of March compared to the previous month, according to the central bank.
Data released by the Maldives Monetary Authority (MMA) shows the balance of the official reserve at USD 791 million at the end of March – down from USD 832.1 million at the end of February.
It marks a 4.9 percent decline.
The decline in the official reserve follows a consistent rise in the balance of the reserve from September 2024 onwards.
Monthly reserve balance:
In a statement noting the increase in official reserve in January, the MMA attributed the spike to an increase in income compared to expenditure. It said that taxes and fees collected by the state in US dollars increased by 12 percent in January compared to the previous month. The central bank also cited an increase US dollars injected to the MMA under the foreign currency regulation.
According to the MMA, businesses that earn in USD exchanged over USD 50 million in local banks by the end of January, based on earnings in October.
Another reason cited for the increase in the official reserve was the implementation of an USD 400 million currency swap agreement signed with India last year.
The Foreign Currency Act, which took effect on January 1, requires tourist establishments to exchange a portion of earnings with local banks.
The law categorizes tourist establishments into two types.
Category-A tourist establishments are classified as registered resorts, integrated tourist resorts and private islands. Such establishments are required to either exchange USD 500 per tourist or 20 percent of the monthly revenue.
Meanwhile, Category-B tourist establishments are classified as registered tourist vessels, tourist hotels and tourist guesthouses. Such establishments are required to either exchange USD 25 per tourist or 20 percent of the monthly revenue.
The law was drafted to address a USD crunch in the Maldives by inject more foreign currency into the banking system.
The Maldives has been receiving urgent appeals by international financial agencies – including the International Monetary Fund (IMF) and the World Bank - to cut down costs and expedite the implementation of fiscal reforms.
The government has repeatedly expressed confidence in being able to cut down costs and overcome the current economic crisis.
