Efforts to strengthen the Maldives’ financial stability have shown measurable progress as the country recorded a 27 per cent rise in usable reserves by the end of May 2025, according to the latest figures published by the Maldives Monetary Authority (MMA). The increase reflects successful monetary management, reduced short-term liabilities, and newly implemented regulatory measures on foreign currency flows.
The MMA’s monthly statistics report reveals that the official reserve assets stood at USD 815.8 million at the end of May, supplemented by USD 144.3 million in local investments held by banks. This brought the Maldives’ total gross international reserves to USD 960.1 million. However, not all reserves are immediately available for use due to existing external commitments.
Short-term external liabilities, which account for currency obligations due within a year, declined from USD 828 million in April to USD 742.2 million in May. This reduction significantly boosted usable reserves to USD 217 million, up from USD 171.3 million in the previous month, marking a month-on-month increase of USD 45.7 million.
According to the MMA, this improvement in usable reserves was primarily driven by the reduction in short-term liabilities, enhancing the country’s ability to meet its foreign currency needs. The central bank emphasized that this trend supports broader efforts to strengthen the Maldives’ external position and ensure macroeconomic stability.
The positive developments have not gone unnoticed internationally. Credit rating agency Fitch Ratings, which monitors the Maldives’ fiscal health closely, recently cited the uptick in usable reserves as a key reason for maintaining the country’s sovereign credit rating. In its analysis, Fitch highlighted both the country’s improving reserve coverage and support measures from external partners.
Among the support mechanisms acknowledged is the USD 400 million currency swap arrangement with the Reserve Bank of India, which continues to provide essential liquidity support to the Maldives’ foreign exchange market. This, combined with new currency management policies, has been instrumental in easing pressure on the foreign reserves.
One such regulatory measure is the foreign currency remittance requirement introduced by the MMA in June 2025, aimed at better managing US dollar inflows. Under this new policy, commercial banks are now required to remit 90 per cent of their foreign currency earnings, particularly from businesses that generate income in dollars. These funds are then pooled and redistributed by the MMA to sustain the availability of foreign exchange services across the economy.
By enforcing this rule, the MMA aims to boost transparency, optimize foreign currency circulation within the domestic banking system, and improve public access to forex services. The central bank reaffirmed that such reforms are part of a wider policy framework to enhance economic resilience and ensure efficient monetary governance in the face of global economic challenges.
The May 2025 financial report from the Maldives Monetary Authority stands as a testament to the country’s ongoing efforts to shore up fiscal buffers, manage foreign currency liquidity, and foster economic confidence among investors, tourists, and international partners alike.
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