The Maldives Monetary Authority (MMA) has reported that the country’s foreign exchange reserves reached USD 832 million by the end of July 2025, showing signs of recovery after a period of decline.

According to the central bank, USD 212.6 million has been spent so far this fiscal year on servicing foreign debt, an increase of 60 per cent compared to the same period last year. The MMA attributed the previous decline in reserves to rising fuel costs and increased foreign currency demand. Between 2022 and 2024, 49 per  cent of the foreign currency sold by the MMA was allocated to fuel imports, up from 33 per cent between 2017 and 2021.

MMA explained that the COVID-19 pandemic significantly affected reserves in 2020. Despite improvements in tourism and economic growth since 2021, the reserves have not increased proportionately, mainly due to high import costs and rising foreign currency demands.

Reserves fell to USD 371.2 million by September 2024 but have improved following Government and central bank interventions. Key measures include a currency swap agreement with the Reserve Bank of India, the introduction of a Foreign Currency Act requiring banks to sell a portion of foreign earnings, and increased tax revenue in US dollars from the tourism sector.

The Government’s revenue from tourism-related taxes and fees rose by 30 per cent year-on-year. Meanwhile, the MMA received USD 247.2 million from foreign currency deposits under the new currency law.

In addition to debt repayments, the MMA sold USD 274.3 million to the State Trading Organisation (STO) to fund imports of essential goods such as oil, food, and medical supplies. USD 217 million was also sold to meet the foreign currency needs of private businesses and individuals through domestic banks.