The Maldives Monetary Authority (MMA) has dismissed recent media reports alleging that the country's usable reserves are depleted, calling the claims false and misleading. The central bank assured that reserves are expected to rise by the end of August compared to July.
The MMA emphasised its commitment to transparency, noting that it publishes reserve data monthly. The authority expressed concern over the inaccuracies in the media reports and reaffirmed that the projections indicate an increase in usable reserves by the end of August.
Minister of Economic Development and Trade Mohamed Saeed also refuted claims of diminishing dollar reserves. The MMA clarified that the dollars deposited in the Sovereign Development Fund (SDF) are counted in the reserves, in line with a 2019 agreement between the MMA and the Ministry of Finance. Starting December 2023, foreign exchange in the SDF will be held in dollars rather than deposited with the MMA.
As of July, available reserves were USD 45 million, excluding an additional USD 65 million in the SDF. The MMA anticipates that government initiatives to boost foreign exchange deposits in the SDF will further increase these reserves. Additionally, improved performance in the tourism sector is expected to positively impact reserves for the remainder of the year.
The government is actively seeking external financing to support foreign exchange transactions involving government and state-owned enterprises (SOEs). The MMA is exploring currency swap arrangements, which have been used in recent years to enhance foreign currency liquidity. A swapline is anticipated to provide up to USD 400 million in financing, with USD 100 million already utilized to bolster reserves in 2023.
Under the leadership of Governor Ahmed Munawwar, the MMA continues to collaborate with government ministries, particularly the finance ministry, to strengthen the economy and ensure financial stability. Despite current challenges, the MMA is optimistic about improving reserves by August and confident in achieving positive outcomes through joint efforts with the finance ministry, other government bodies, and financial institutions.