Maldives Monetary Authority (MMA) has decided to inject more foreign currency into banks in order to maintain the exchange rate in Maldives amid the COVID-19 pandemic.
In a statement issued to provide details of the measures taken to mitigate the impact of COVID-19 on the financial system and exchange rate stability, MMA announced the decision to obtain funds amounting to USD 150 million under the currency swap agreement signed between MMA and the Reserve Bank of India. MMA stated the funds will be injected into banks as part of the efforts to maintain the foreign currency exchange rate in Maldives, amid the severe impacts of COVID-19 on the local economy.
Furthermore, the authority said it will be taking the regulatory measures to facilitate a moratorium of 6 months on loan repayments for those impacted by the current situation, adding customers have to submit their requests to the banks in order to avail themselves of this moratorium. MMA also announced the decision to reduce the Minimum Reserve Requirement (MRR) up to 5% to provide liquidity support to banks, as and when needed.
In addition, MMA stated a short term credit facility will be made available to financial institutions as and when required. The authority also stated a request has been made to the International Monetary Fund (IMF) for financial assistance to overcome the current situation.
Furthermore, MMA said necessary arrangements have been made in coordination with government agencies and banks to provide banking and payments services by MMA during the period where government offices are closed. MMA further stated the authority will continue to closely monitor future developments and take the necessary actions to support economic activity.