The Maldives Monetary Authority (MMA) has countered recent media allegations suggesting that the nation’s reserve funds are severely depleted. The central bank labeled these reports as inaccurate and misleading, asserting that reserves are expected to show improvement by the end of August compared to July.
In a statement emphasizing its dedication to transparency, the MMA highlighted its practice of regularly publishing reserve data each month. The authority expressed concern about the erroneous information circulating in the media and assured that their projections indicate a rise in usable reserves by August’s conclusion.
Economic Development and Trade Minister Mohamed Saeed also rejected claims about declining dollar reserves. The MMA clarified that funds deposited into the Sovereign Development Fund (SDF) are included in the reserve totals, in accordance with a 2019 agreement with the Ministry of Finance. From December 2023 onwards, foreign currency in the SDF will be maintained in dollars rather than being deposited with the MMA.
As of July, the MMA reported available reserves of USD 45 million, with an additional USD 65 million held in the SDF. The central bank expects that government efforts to increase foreign exchange deposits into the SDF will further enhance these reserves. Furthermore, positive developments in the tourism sector are projected to contribute to an increase in reserves for the remainder of the year.
The government is actively pursuing external financing to support foreign exchange transactions for government and state-owned enterprises (SOEs). The MMA is also considering currency swap arrangements, which have previously been used to improve foreign currency liquidity. A swapline is anticipated to provide up to USD 400 million in financing, with USD 100 million already allocated to strengthen reserves in 2023.
Governor Ahmed Munawwar and the MMA continue to work closely with government ministries, particularly the finance ministry, to bolster the economy and ensure financial stability. Despite current challenges, the MMA remains optimistic about the projected improvement in reserves by August and is confident in achieving positive results through collaborative efforts with the finance ministry, other governmental entities, and financial institutions.
