Governor of the Maldives Monetary Authority (MMA) Ahmed Munawwar has held comprehensive discussions pertaining to the development of the financial sector, with the banks operating in the Maldives. The discussions primarily focused on the joint collaborative efforts of the banks to work across various sectors, strengthen the relations between the banks and MMA, while exerting maximum efforts to develop the financial sector. The banks which participated in the discussions include Bank of Maldives (BML), Maldives Islamic Bank (MIB), State Bank of India (SBI), Bank of Cylon (BoC), Mauritius Commercial Bank (MCB), Commercial Bank of Maldives (CBM), Habeeb Bank and Hong Kong and Shanghai Banking Corporation (HSBC).
Since MMA's Governor Munawwar assumed office, he has been working alongside the ministries, particularly the Ministry of Finance, aiming to improve the economic and financial situation of the country. MMA expressed confidence that these collaborative efforts are yielding positive results and will help overcome the challenges facing the Maldivian financial system. As such, it announced that the country's national reserve is expected to see improvements this month, citing positive developments in the nation's economic and financial situation.
During a briefing to the Parliamentary Finance Committee, Munawwar noted that the financial sector is a highly diversified part of the economy, contributing 6% to the Gross Domestic Product (GDP). He set a target to double this contribution within five years, emphasising that this goal is achievable through effective human capital development and increased regional investment. He also envisions transforming the Maldives into a financial hub comparable to Singapore.
In an interview with PSM News, MMA revealed that an agreement signed in 2019 between the authority and the Ministry of Finance allowed the central bank to exchange dollars deposited in the Sovereign Development Fund (SDF) for Maldivian Rufiya, including them in the usable reserve. However, this arrangement ended in December 2023. MMA now retains the dollars in the SDF without exchanging them, with the fund currently holding an available balance of USD 65 million. It noted that deposits into the SDF are expected to surpass forecasts due to recent measures taken by the government to increase contributions to the fund.
The central bank highlighted the anticipated exponential growth of the Maldives' tourism industry, predicting that this will have a positive impact on the national reserve. Additionally, the government is actively seeking financing from foreign entities to support the foreign exchange needs of the state and state-owned companies. MMA further disclosed its ongoing efforts to enhance foreign currency liquidity through currency swap arrangements, which have been employed in recent years.
The efforts undertaken by the government to improve the financial and economic situation of the nation has been lauded by several foreign financial administrative bodies. The entities are optimistic that the financial situation will undoubtedly improve, upon the implementation of the government's reform agenda.