Maldives Monetary Authority (MMA) has increased the amount of US Dollars (USD) issued to banks, as part of the efforts to control the inflation rate amid COVID-19 pandemic.
MMA stated the authority is undertaking several measures to mitigate the impact of the pandemic on the Maldivian economy, as it is mandated with maintaining inflation around the same level as the GDP of the country. The authority said it increased the amount of foreign currency issued to banks in April, May, June and July, as part of its efforts to maintain the exchange rate.
Additionally, MMA has has also decided to increase the foreign exchange intervention for a duration of three months, starting from September. MMA states the additional supply of foreign currency could only be used to import necessities such as food and medical supplies.
In addition to increasing supply of foreign currency, MMA has also decided to reduce the Minimum Reserve Requirement (MRR) at MMA up to 5 percent starting from July. This is the second time the MRR was revised during the pandemic.
MMA stated efforts are underway in association with the government, banks and financial institutions to mitigate the impact of the pandemic on the reserve. In this regard, the authority revealed it has secured USD 250 million in loans from India.
MMA additionally revealed USD 150 million has been obtained under the currency swap agreement signed between MMA and the Reserve Bank of India, in an effort to ensure sufficient foreign currency reserve.