Maldives foreign currency reserve grows

Gross international reserves at the central bank stood at US$625.9 million at the end of January, according to the Maldives Monetary Authority’s monthly economic review.

The foreign currency reserves grew seven percent from the previous month and 31 percent compared to the same period last year.

However, usable reserves – “the amount of funds that are readily available for use by the MMA in the foreign exchange market” – was US$205.6 million, enough to pay for about a month of imports. It was up two percent annually and remained unchanged in monthly terms.

The total outstanding stock of government securities, including treasury bills and treasury bonds, meanwhile totalled MVR23.4 billion (US$1.5 billion) at the end of January.

The usable reserves dwindled last year due to loan repayments and expenditure related to the development of a new hospital in Malé, prompting MMA Governor Ahmed Naseer to express concern about the Maldives’ vulnerability to external shocks, such as oil price hikes and reduced tourist arrivals.

Despite high foreign currency receipts from tourism revenue, the country has been facing a persisting US dollar shortage, with businesses forced to buy from the black market to pay for imports.

The Maldives imported MVR4 billion (US$260 million) worth of goods in February, during which exports amounted to MVR240 million (US$16 million), customs statistics show.