The Maldives Monetary Authority (MMA) has reaffirmed the capability of the government to service the upcoming external bond repayment in October 2024 and extended complete assurance that the obligation will be met in full by the due date. In a statement made public by the authority, it stated that their remains no doubt that the MMA and the Government of the Maldives, together with all related government institutions, will be able to meet all future external debt obligations.
MMA's statement came following the credit rating action of the Maldives by Moody’s Ratings. The statement read that the authority projects GDP growth to reach 4.9% in 2024, and expand to 6.5% in 2025. It also stated that the growth estimates are expected to be supported by the robust performance of the tourism sector, underpinned by the strong growth in tourist arrivals with the opening of the new arrival terminal at the Velana International Airport. Accordingly, MMA noted that by the end of August 2024 total tourist arrivals to the country have exceeded 1.3 million, observing a 10% increase relative to the corresponding period of 2023. Further, it was also noted that the average duration of tourist stay has risen by 7% in July 2024 when compared with July 2023..
MMA also notes that at the end of August 2024, both the gross international reserves and net reserves have improved relative to the previous month. Accordingly, gross international reserves have increased from USD395 million at the end of July 2024, to USD444 million at the end of August 2024, while net reserves have improved to USD61 million by the end of the month. Further, with the inclusion of the usable reserves and SDF balance, the gross international reserves are expected to surpass the USD606 million projected for the Government Budget 2024.
With the aim of minimising the challenges to maintaining exchange rate stability, MMA states that work is currently underway to reduce the surplus liquidity in the banking system by utilising monetary instruments. MMA notes that it will commence Open Market Operations this year to mop-up the surplus liquidity.
The statement also read that to overcome the challenges to the foreign exchange market, revisions to the Monetary Regulation will be announced during this month, which is expected to boost the amount of foreign currency entering the domestic banking system.