Maldives Monetary Authority (MMA) has increased the amount of foreign currency issued to banks, as part of the efforts to maintain the exchange rate amid the COVID-19 pandemic.
MMA stated efforts are underway in association with the government, banks and financial institutions to mitigate the economic impact of the pandemic on Maldives. In this regard, the authority said more foreign currency is being injected to the foreign exchange market, while the amounts provided to banks have been increased through the different facilities established at MMA.
MMA stated funds amounting to USD 150 million will be obtained under the currency swap agreement signed between MMA and the Reserve Bank of India. The authority 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.
MMA has predicted the demand for US dollars to decrease in the upcoming months, as the stock of goods required for tourism would decrease during this period. The authority stated the measures imposed under the economic recovery plan of the government will help to retain enough foreign currency to continue importing items.
MMA revealed the usable reserve of Maldives was recorded at USD 277 million by the end of February.