The Maldives Monetary Authority (MMA) has implemented a series of regulatory and monetary measures aimed at stabilising the Maldivian Rufiyaa (MVR), increasing the supply of foreign currency in the market, and addressing excess liquidity in the financial system.

The central bank confirmed that rising volumes of rufiyaa in circulation have prompted concerns over potential pressure on the exchange rate. In response, the MMA enforced new foreign exchange regulations and a foreign exchange law designed to improve the flow of US dollars into the domestic banking system.

Under the new framework, businesses earning in foreign currency will be required to deposit all such earnings with licensed banks. These banks must then allocate a defined percentage of the deposits to the MMA. Currently, 60 per cent of foreign currency sold to banks is purchased by the central bank, while 30 per cent is returned to the banks on a weekly basis to support equitable access to foreign exchange by businesses.

In June and July 2025, the MMA sold USD 23.3 million to commercial banks as part of its weekly auction policy. Compared to the same period last year, the volume of foreign currency made available to businesses and individuals through banks has increased by 23 per cent.

In an effort to ease constraints on lending and increase foreign exchange inflows, the MMA has further reduced the statutory reserve requirement for commercial banks. Following a previous adjustment from 10 per cent to 7.5 per cent, the requirement was lowered to 5 per cent effective 24 July, releasing an estimated USD 45 million into the banking system for lending purposes.

To reduce excess rufiyaa in circulation, the MMA conducted a reverse repurchase operation in July, withdrawing MVR 2.1 billion from the banking system. The operation forms part of broader open market strategies to manage liquidity and mitigate inflationary pressures.

The authority is also working on enhancing cross-border trade settlement options, including currency settlement agreements with key trading partners such as India and China. Negotiations with India are currently underway to enable bilateral trade using local currencies, a move expected to reduce dependence on the US dollar.