By the end of last year, the total amount circulating in the economy had increased by MVR 11 billion, to a total of MVR 52.4 billion.
According to the annual report released by the Maldives Monetary Authority (MMA), the amount of money in circulation in the economy, also known as “broad money” increased to 27 percent in 2021. This is an increase of 65 percent compared to the previous year.
MVR 36 billion was recorded as currency in circulation in 2019. In 2020, the figure stood at MVR 41 billion. Therefore, the amount circulating in the economy increased by MVR 11 billion in 2021 compared to the previous year. This implicates an increase in the amount of money generated from economic activities.
MMA revealed that the increase in the amount of money circulating in the economy can be attributed to the increase in number of net foreign assets and net domestic assets. While net foreign assets increased due to the rise in foreign currency deposits, net domestic assets increased with the rise in funds deposited to MMA by commercial banks.
Last year, the number of loans issued by commercial banks to the public increased to MVR 1 billion. This is also one of the reasons for the increase in the amount of money circulating in the Maldivian economy.
MMA expects the Maldivian economy to return to its pre-COVID-19 status this year.