The Maldives usable reserve has dropped to USD 200 million according to Maldives Monetary Authority (MMA).
As per the latest statistics from the central bank, the 2023 fiscal year began with a usable reserve of USD 260 million; indicating a USD 60 million drop from the last reviewed date.
The usable reserve stood at USD 400 million by the end of March 2022, and indicated a 50 percent decline in the corresponding month this year.
The average usable reserve for 2022 stood at USD 290 million while the reserve continued a gradual decline from April until October. The usable reserve dropped to USD 105 million during October after which it saw an increase during the last quarter of 2022.
The usable reserve is calculated after deducting the short-term foreign liabilities from the Maldives national reserve, and indicates the state’s ability to settle its foreign transactions on time.
MMA also reported that the gross national reserve stood at USD 790 million at the beginning of 2023, which has dropped to USD 760 million by the end of the first quarter.
According to the central bank the main contributor to the significant reserve decline is settlement of loans and security, for which the government has already spent USD 564 million.
The government usually saves its revenue to increase the national reserve, while it also has the option of currency swap up to USD 400 million from the Reserve Bank of India (RBI). Although the government has made good use of the currency swap facility, its reserve will continue to dwindle if the country loses more foreign currency than it earns.
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