- MMA's foreign currency assets rose 6.5 per cent to MVR 11.81 billion in October, driven by higher cash and bank balances.
- Liabilities to the Asian Clearing Union jumped from MVR 465 million to MVR 1.09 billion, reflecting the timing of biennial regional settlements.
- Net foreign currency position improved to MVR 2.36 billion from September's MVR 1.92 billion, but stayed below August's MVR 2.54 billion.
The Maldives Monetary Authority (MMA) recovered some of the ground it lost in September as its foreign currency cash and bank balances rose in October. The improvement was tempered by a larger bill for settling regional trade payments, while the central bank’s overall foreign currency position remained below its August level.
Foreign currency assets rose 6.5 per cent from September to MVR 11.81 billion. Higher cash and bank balances accounted for most of the increase, with foreign securities also rising in value. This partly reversed September’s decline, when the MMA held less in cash and securities and more in short-term loans to commercial banks.
The largest increase on the liabilities side was the amount owed to the Asian Clearing Union, which rose from MVR 465 million in September to MVR 1.09 billion in October, roughly where it stood in August. The union allows member central banks to offset payments owed to one another and settle the difference every two months. The timing of those settlements can produce large swings in the amount owed from one month to the next.
After deducting foreign currency liabilities, the MMA’s foreign currency assets exceeded those liabilities by MVR 2.36 billion in October, up from MVR 1.92 billion in September and below MVR 2.54 billion in August. That puts the October improvement in perspective. The central bank rebuilt part of the gap that narrowed in September, even as its regional payment obligations increased.
For businesses that rely on foreign currency to pay overseas suppliers, the separate reserve figures give a clearer picture of what the central bank has available after accounting for near-term commitments. The latest published reserve data cover September, when official reserves stood at USD 547.8 million and the measure of usable reserves was USD 169.8 million. The October reserve figures will show whether the improvement on the balance sheet translated into more foreign currency available for external payments.
