The Maldives Monetary Authority (MMA) has decided to increase the amount of US dollars allocated to banks each week by 51 percent, with the aim of making it easier to obtain foreign currency through the banking system and improving liquidity in the foreign exchange market.
The 51 percent increase, which will take effect this week and remain in place for the next three weeks, is intended to improve access to foreign currency through the banking system and address the difficulties businesses face in obtaining the funds required to import goods, the MMA said.
The central bank said it has been taking a number of important measures to ease pressures in the foreign exchange market following a decline in the amount of dollars entering the Maldives since February. The MMA attributed the decline to disruptions in the Middle East, which have affected the tourism industry.
The MMA has previously taken several measures to address the shortage of foreign currency. In February this year, it increased the amount of dollars allocated to banks by 32 per cent to support businesses importing essential food items ahead of Ramadan and help keep prices stable.
In addition, in June, the MMA increased the weekly dollar allocation to banks by 26 per cent to provide further support to businesses during the tourism industry's off-season.