Maldives Monetary Authority (MMA) has absorbed MVR 3 billion from the banking system through its open market operations (OMO) launched in July last year.

The reverse repurchase operations were introduced to reduce excess Maldivian rufiyaa liquidity in circulation within the banking system, with the aim of easing pressure on the exchange rate.

According to MMA figures, the government currently holds around MVR 14 billion in long-term bonds issued at various times.

The central bank’s annual report shows that money supply in the economy increased by 21 percent last year, with total circulation reaching about MVR 72 billion.

Over the past two years, the MMA has amended the Monetary Authority Act to strengthen reserve requirements and manage exchange rate pressures. The authority said these measures have helped increase foreign currency inflows into reserves, alongside government repayments of sukuk obligations.

However, the report noted that rising rufiyaa circulation combined with weaker foreign currency inflows could place additional pressure on the exchange rate.

It added that external factors, including regional instability in the Middle East, have affected tourist arrivals and reduced tourism-related foreign currency earnings.

Earlier this week, Bank of Maldives (BML) also introduced additional measures aimed at tightening controls on dollar usage by customers.