According to statistics from the Maldives Monetary Authority (MMA), the official reserves stood at $860 million at the end of last month. This is an increase of $50 million compared to the previous month. Looking at the figures released by the central bank, the official reserves at the end of August were $810.05 million. As this amount increased by the end of September, the reserves stood at $859.46 million at the end of September. This represents a 6 percent increase month-on-month.
The central bank’s statistics show that as of the end of last month, there were $116.64 million in securities investments and other foreign currency assets not included in the official reserves. Although the official reserves have increased, the amount of short-term liabilities has increased by the end of August. Accordingly, the amount of short-term foreign currency liabilities stood at $781.75 million at the end of September. This figure was $738.63 million in the previous month.
With this change in the amount, the central bank’s statistics show that the usable reserves have decreased. The usable reserves are calculated by subtracting the amount of foreign currency liabilities due within the next year or less from the sum of the official reserves and foreign currency amounts held as investments not included in the official reserves. This is the amount immediately available for use from the reserves. At the end of September, the usable reserves stood at $194.35 million. This is an increase compared to the previous month. While the usable reserves at the end of August were $188.64 million, this represents a 3 percent increase month-on-month.
The government has made many efforts to strengthen the country’s reserves and increase the amount in the reserves. Under the new foreign currency law, 60 percent of the dollars received by banks are being used by the MMA to strengthen the reserves. In addition, while foreign currency revenue from tourism has increased this year, the $400 million currency swap signed with the Reserve Bank of India under the SAARC framework is also a reason for the positive change in reserves this year, according to the MMA. The MMA has stated that this swap will be fully utilized. While the government is working to bring a positive change to the official reserves, the Maldives has to pay the largest amount of debt this year and next year. As a large amount of debt needs to be paid next year, the strengthening of reserves provides relief for debt repayment, according to the central bank.
