The Maldives’ usable reserves saw a notable decline of four percent by the end of March, compared to the previous month, according to statistics released by the central bank, the Maldives Monetary Authority (MMA).
As of March, usable reserves stood at $163 million, down from $179 million in February. This marks a significant reduction in the nation’s financial buffer, which has been closely monitored in recent months.
In addition to the decrease in usable reserves, official reserves also experienced a decline of approximately five percent. Official reserves were recorded at $790 million at the end of March, a drop of around $40 million from the $832 million reported in February.
However, following the sharp drop in reserves, the Maldives’ financial situation began to show signs of recovery with the infusion of a $400 million currency swap facility from the Reserve Bank of India. Notably, this marked the first time the currency swap funds were directed into Maldivian banks, with $120 million being invested domestically. Previously, such funds were held in foreign banks.
This shift in strategy has contributed to the stabilization of the reserves, with the country’s total reserves maintaining levels above $700 million over the past three months.
In comparison, the Maldives’ total reserves stood at $673 million at the close of December last year, marking a challenging period for the nation’s financial stability. Despite these setbacks, the average level of usable reserves in 2023 was $75 million—46 percent higher than the figures recorded in the previous year.
