The Maldives Monetary Authority (MMA) has decided to increase the percentage of US dollars released to Maldivian banks for business purposes, including TTs and LC payments for imports, by 10%. As the central bank decided to implement this change starting this week, this adjustment will facilitate an increase to 40% in the amount banks currently sell to small and medium enterprises. Since June of this year, the foreign currency that banks are required to sell to the MMA every week has been increased from 60% to 90%. However, according to the MMA’s calculations, the additional 30% that banks exchange is being sold back to the banks every week.
The main purpose of this change, as revealed by the MMA, is to provide foreign currency needed by businesses through the foreign currency sold by banks each week in a more robust and equitable manner than at present. The 30% that the MMA returns to banks is used for specific purposes. These include various essential public needs and activities such as importing food items. A large percentage of this amount is used to provide foreign currency assistance needed by small and medium enterprises.
Statistics disclosed by the MMA reveal that with the changes to the Foreign Exchange Act, the percentage of dollars sold to small and medium enterprises through banks currently stands at around 30%. However, the central bank’s target is to increase the amount given to small and medium enterprises through banks to 50%.
