The Maldives Monetary Authority (MMA) has reported that the country’s official reserve assets stood at USD 673.2 million in December 2024, marking a 14 per cent increase compared to the same period in 2023.

The usable reserves were recorded at USD 63.2 million as of December 2024.

According to the MMA’s monthly statistics, the official reserve assets comprise USD 666.5 million in foreign currency reserves, USD 6.3 million in the IMF reserve position, and USD 0.4 million in Special Drawing Rights (SDRs), bringing the total official reserves to USD 673.2 million.

The foreign currency reserves include USD 252.7 million held in securities and USD 413.8 million in currency and deposits. Of these deposits, USD 44.9 million are held in other national central banks, the Bank for International Settlements (BIS), and the IMF, while USD 368.9 million are in banks headquartered outside the Maldives.

Assets not included in the official reserves consist of securities worth USD 2.3 million and deposits amounting to USD 146.3 million. When combined with the official reserve assets, the total reserves stood at USD 821.8 million as of December 2024.

The report also highlights that the predetermined short-term drain, including loans, securities, and deposits, amounted to USD 697.4 million, with an additional USD 61.2 million classified under other obligations.

To strengthen the reserves, the MMA secured USD 400 million through a currency swap agreement with the Reserve Bank of India, in October 2024.

In a related development, the new Foreign Currency Act requires tourist businesses to convert their foreign exchange earnings from October 2024 to local banks by January 28, 2025. The Government has reported that resorts and other tourism-related businesses have already exchanged USD 25 million in banks in compliance with the foreign currency regulations.

The MMA estimates that approximately USD 40 million will flow into the financial system from the foreign earnings exchanged from October. This is expected to reduce the strain on official reserves as foreign currency-earning businesses begin exchanging more currency with local banks. Additionally, the MMA plans to purchase 60 per cent of the foreign currency deposited, further stabilising the reserve position.