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Maldives’ Usable Reserve at USD63.2 Million by End of 2024

The government's usable reserves stood at USD63.2 million at the end of last year, according to the country’s central bank, Monetary Authority of Maldives (MMA).

According to the MMA’s financial statistics, the government's general reserves stood at USD673.2 million at the end of last year.

In addition, the MMA has a total of USD148.56 million in other foreign exchange assets, including USD146.27 million in cash invested in local banks and USD2.29 million in securities investments not included in official reserves, bringing the total reserves to USD821.8 million.

The total usable reserve is calculated after deducting the amount of foreign exchange obligations payable for the coming year. At the end of last year, predetermined short-term net drains or the total amount of these obligations, stood at USD758.56 million, according to MMA data.

Deducting this figure from total reserves, the usable reserve stood at USD63.2 million at the end of 2024, MMA data showed.

This Administration has launched several initiatives to strengthen and improve its state reserves. Credit rating agencies have cited the decline in reserves as the main reason behind Maldives’ falling credit rating.

The government has previously said that the main reasons for the adverse impact on reserves were printing large amounts of local currency, borrowing at high interest rates and wastages during the Covid-19 pandemic.

In a bid to arrest the slide and alleviate the pressure on foreign currency needs, Maldives has secured a USD400 million currency swap facility from the Reserve Bank of India (RBI), part of which has already been invested in local banks.

The government has also pushed through a new Foreign Currency Law (Forex Law) designed to mitigate the ongoing foreign currency shortage in the country. The law which comes into effect from 28 January, mandates tourism facilities to exchange a portion of their foreign earnings through local banks.