The Maldives Monetary Authority (MMA) has decided to introduce two primary adjustments to its monetary policy aimed at curbing the excess liquidity circulating within the economy. The first measure involves an increase in the Minimum Reserve Requirement (MRR)—the percentage of deposits commercial banks are mandated to hold at the central bank—raising it from the current 10.5% to 11% effective this September. This rate is scheduled for review every three months, with a strategic plan to further increase it to 13% by the end of next year.
The second measure focuses on expanding ‘Open Market Operations’ (OMO) to effectively absorb surplus liquidity from the banking system. These policy interventions have become necessary to address the significant increase in Maldivian Rufiyaa within the banking sector, a situation resulting from extensive currency printing by the previous administration. This surplus has intensified the demand for US Dollars, and these measures are intended to mitigate those pressures and stabilize the foreign exchange market.
