Usable reserves in the Maldives have decreased to USD 67 million in June this year, marking a drop of USD 4 million from the previous month. This decline is detailed in the latest economic update from the Maldives Monetary Authority (MMA), reflecting ongoing financial challenges faced by the country.
In April, the reserves stood at USD 114 million. By May 2023, usable reserves were recorded at USD 148 million but have since plummeted to USD 73 million in May this year, indicating a steep 50 percent decline over the period.
Total reserves also witnessed a downturn, standing at USD 509 million in June, a decrease from USD 551 million at the beginning of the year. February saw the highest level of total reserves this year, with a peak of USD 588 million.
The current level of usable reserves covers approximately one month’s worth of imports, highlighting the precarious position of the nation’s foreign exchange reserves. In response to this situation, the Ministry of Finance has announced that the government is working on establishing a currency swap facility to bolster reserve management.
At the end of last year, usable reserves were significantly higher at USD 179 million. The substantial reduction in reserves is attributed to the deteriorating financial conditions in the country, which has compelled the government to implement austerity measures to curtail expenditure.
The Maldives continues to grapple with economic strain, and the latest figures underscore the urgency for effective financial strategies to stabilise the reserves and ensure economic resilience.
