The Maldives Monetary Authority (MMA) has reported a 27 per cent increase in usable reserves, driven by a decline in short-term financial obligations and regulatory changes targeting foreign currency flows.

According to data published by the central bank, the country’s official reserve assets stood at USD 815.8 million at the end of May, with a further USD 144.3 million held as investments in local banks. This brought total reserves to USD 960.1 million.

Short-term external liabilities were recorded at USD 742.2 million for the same period, down from USD 828 million the previous month. As a result, usable reserves rose to USD 217 million, up from USD 171.3 million in April.

The MMA attributed the month-on-month increase largely to the reduction in short-term liabilities, improving the central bank’s capacity to meet foreign currency demands.

The improvement in reserves comes amid broader efforts to stabilise the country’s external position. Credit rating agency Fitch recently cited the recovery in reserves as a key factor in its decision not to downgrade the Maldives’ sovereign rating. The agency pointed to support measures including a USD 400 million currency swap provided by the Reserve Bank of India, as well as recent legal reforms requiring businesses earning in foreign currency to deposit a portion of their earnings into the local banking system.

Under the new policy introduced in June, the MMA now requires commercial banks to remit 90 per cent of their dollar earnings. The funds will then be redistributed to ensure the continued provision of foreign exchange services to the public.