The Maldives’ usable foreign exchange reserves increased by USD 10 million in July, reaching USD 213.22 million, according to the recent data from the Maldives Monetary Authority (MMA).

This represents a 5 per cent rise from USD 203 million at the end of June.

The increase in usable reserve reflects the Government’s efforts to strengthen financial buffers, with President Dr Mohamed Muizzu’s Administration introducing fiscal and monetary measures to stabilise the economy after pandemic-related disruptions.

In addition, official reserves, a broader measure closely tracked by international credit rating agencies, fell by 6 per cent to USD 774.52 million in July, down from USD 832.4 million in June. The MMA stressed the importance of maintaining official reserves at adequate levels, noting their role in determining the Maldives’ sovereign creditworthiness.

Short-term foreign currency obligations also eased, declining from USD 774.5 million in June to USD 688.24 million in July.

The Government’s reserve-building drive follows years of fiscal strain in the wake of Covid-19. The MMA has stressed that the country’s rising debt-to-GDP ratio has complicated access to foreign financing. In response, measures such as the revised foreign currency law, which requires 60 per cent of US dollar inflows from commercial banks to be channelled into reserves, have been implemented.

Higher foreign currency earnings from tourism have further strengthened reserves this year. Additional support is expected from a USD 400 million currency swap agreement with the Reserve Bank of India under the SAARC Framework, which the MMA plans to fully utilise.

The country still faces significant debt servicing pressures, with more than USD 1 billion in repayments due next year. The MMA reiterated that maintaining a strong reserve position will be critical to meeting these obligations and safeguarding macroeconomic stability.