The central bank, MMA, has decided to utilize the 30 billion rupees (343 million dollars) currency swap facility obtained under an agreement with the Reserve Bank of India (RBI).
MMA stated that they will begin using the 30 billion rupee facility towards the end of this year. The bank is currently making the necessary administrative preparations related to this.
The facility was arranged during President Dr. Mohamed Muizzu’s visit to India last October.
During that trip, India also renewed a 400 million dollar currency swap facility.
That facility was taken in October of last year. Since then, its duration has been extended twice.
The new facility is being taken as the previous 400 million dollar facility expires.
Last year was one of the years when the Maldives’ reserves fell to their lowest in recent history. The reserves are declining due to the government’s need to cover fuel and other expenses, as well as an increase in debt repayment amounts. So far this year, 213 million dollars (3.3 billion rufiyaa) from the reserves have been used for debt repayment. STO has been given 274 million dollars (4.2 billion rufiyaa) from the reserves for importing fuel, staple foods, medicine, and medical equipment.
As of last June, the reserves stood at 832 million dollars. The usable reserves for that month were 202 million dollars.
To improve the state of the reserves, MMA has made changes to the Foreign Currency Act, increasing the amount of dollars banks must deposit. MMA reported that by the end of July, they received 247.2 million dollars from banks as the required amount to be sold to MMA.
