The Maldives’ usable foreign exchange reserves rose by USD 10 million in July, reaching USD 213.22 million, according to newly published data from the Maldives Monetary Authority (MMA). The increase marks a 5 percent gain from the USD 203 million recorded at the end of June.
Defined by the MMA as foreign currency holdings available for immediate expenditure, the usable reserve reflects the government’s intensified efforts to reinforce the country’s financial buffers. The administration of President Dr Mohamed Muizzu has introduced a series of fiscal and monetary interventions aimed at stabilising the economy following pandemic-related disruptions.
While the usable reserve strengthened, the official reserve, a broader metric closely monitored by international credit rating agencies, registered a decline. The MMA reported a fall to USD 774.52 million in July, down 6 percent from USD 832.4 million in June. The central bank underscored the importance of maintaining the official reserve at adequate levels, citing its critical role in determining the Maldives’ sovereign creditworthiness.
Foreign currency obligations due in the short term also contracted during the same period. Figures show a decrease from USD 774.5 million in June to USD 688.24 million in July, indicating a modest easing of immediate external liabilities.
The government’s reserve-building efforts follow a period of fiscal strain in the aftermath of the Covid-19 pandemic. According to the MMA, the national debt, measured as a percentage of economic output, has increased in recent years, complicating efforts to secure foreign assistance. In response, the administration has initiated targeted actions to reverse the trend and restore financial resilience.
Among the measures is the implementation of a revised foreign currency law, under which the MMA now channels 60 percent of US dollar inflows from commercial banks directly into the reserve. The central bank also reported an increase in foreign currency earnings from tourism this year, contributing positively to the reserve position.
Additional support is expected from a USD 400 million currency swap agreement signed with the Reserve Bank of India under the SAARC Framework. The MMA has indicated its intention to fully utilise the facility to strengthen reserve adequacy.
Debt servicing obligations remain a pressing concern. The Maldives faces its largest repayments in recent history, with more than USD 1 billion due next year. The MMA reiterated that a robust reserve position will be essential to meeting these commitments and safeguarding macroeconomic stability.