The Maldives Monetary Authority (MMA) has reported a significant drop in the country’s broad money supply, which fell to MVR 58.9 billion in May 2024. This marks the lowest level recorded for broad money this year, following a period where it generally remained around MVR 60 billion.
April saw the peak of broad money levels, reaching MVR 60.86 billion. However, May’s figures indicate a sharp decline, as detailed in the latest statistics released by the MMA.
Broad money, also known as M2, represents the total money supply available in the Maldives. It includes notes, coins, and any form of money that can be easily converted into cash. The MMA defines broad money as the sum of narrow money and quasi money circulating in the economy.
Narrow money comprises actual physical money, such as banknotes and coins, while quasi money or cash equivalents are non-cash assets that are highly liquid and can be easily converted into cash.
According to the MMA’s statistics, the Maldives’ narrow money totalled MVR 23.1 billion in May. Of this, 85 percent were transferable deposits, and the remaining 15 percent were currency outside depository corporations.
The economy currently holds MVR 35.8 billion in quasi money. This includes 76 percent in transferable deposits and other deposits (foreign currency) and 24 percent in other deposits (local currency).
The decline in broad money supply in May raises concerns about the overall liquidity in the economy and its potential impact on economic activities. The MMA continues to monitor the situation closely to ensure stability in the financial system.
