Dollar reserve insufficient to cover imports for one month

Jul 29, 2024, 3:43 AM
MMA main office. -- Photo: Hussain Shayaah/ Adhadhu

MMA main office. -- Photo: Hussain Shayaah/ Adhadhu

The state’s official dollar reserve did not have enough funds to pay for essential imports for a month by the end of June, statistics from the Maldives Monetary Authority (MMA) have shown.

The gross international reserve stood at USD 509.1 million at the end of last month, according to the MMA’s latest statistics. This was USD 17 million higher than the previous month.

But when unusable funds (predetermined short-term drains) are deducted, the reserve was lower than May last month. This was due to an increase in the amount to be deducted.

According to calculations based on statistics from various sources, the amount needed to pay for essential imports for a month is estimated to be USD 75 million. But the usable reserve stood at USD 66.9 million at the end of last month.

The usable reserve also fell to USD 20 million recently, according to information from credible sources with experience in the finance sector. Adhadhu sought the information after former President Abdulla Yameen said that there was only USD 18 million in the usable reserve.

“The country’s usable reserve has never fallen to this level. The country’s usable reserve would never fall to this level. There’s USD 18 million as a usable reserve,” he said at a People’s National Front (PNF) rally on Thursday.

Information obtained by Adhadhu after Yameen’s remarks show that the usable reserve fell so low as a result of financing fuel imports and providing dollars to state-owned enterprises (SOEs).

But the state of the usable reserve is not as dire now due to dollar income collected since then, a reliable source told Adhadhu on the condition of anonymity.

Despite the depletion of the usable reserve, the government has yet to comment on the issue. Each time that senior government officials have spoken about public finances, they said that there is no cause for concern as reforms are underway.

The reasons for the decline in the reserve include repayment of debt taken for spending disproportionate to income, skyrocketing oil prices in the global market, and the lack of benefits from large investments in the economy and infrastructure development.

Comments

Read More

Latest News

Economic growth could be below one percent

The Maldives' economic growth forecast has been slashed to between 0.6% and 1.8% due to Middle East conflicts disrupting tourism. Finance Minister Hassan Zareer noted that travel route closures and rising fuel costs have caused a sharp decline in arrivals. The government now expects 2.17 million visitors, a 3.5% drop from last year.

Tourist arrivals expected to fall short of previous record

Maldives Finance Minister Hassan Zareer announced that tourist arrivals this year are expected to fall short of previous records and targets. The government revised its year-end estimate to 2.17 million visitors, citing geopolitical tensions as a factor. This decline marks the end of a five-year growth trend for the nation's tourism sector.

Maldivian flight with pilgrims abruptly postponed

A Maldivian flight carrying 250 Umrah pilgrims was postponed due to escalating regional tensions and airspace restrictions near Jeddah. Island Aviation delayed the trip to prioritize passenger safety amid deteriorating conditions in the Middle East. The airline and Hajj Corporation are working to assist affected travelers.

Villa College opens January 2027 intake with over 100 programs

Villa College has opened applications for its January 2027 intake, offering over 100 programs from certificates to master’s degrees. Students can apply until December 26, 2026, for courses in fields like IT, law, and nursing. The college provides international-standard education through partnerships with top UK and Malaysian universities.

Efforts underway to relocate Male' Port to Thilafushi

Maldives Ports Limited has begun relocating Malé’s commercial port operations to Thilafushi, starting with sea-based container clearance. The move aims to reduce congestion at the Malé and Hulhumalé terminals. While China Harbour Engineering Company handles design, local firm MTCC is constructing the new port's quay wall.

CBM re-auctions Malé land plots following loan repayment defaults

The Commercial Bank of Maldives is re-auctioning two land plots in Malé after the owner defaulted on loan repayments. The properties, Maafannu Doragali 2 and 3, have a combined reserve price of MVR 3.8 million. Interested bidders must submit their offers by November 1 with a mandatory bid security of MVR 25,000.

Turkish firm ordered to pay MVR 25 million in unpaid taxes

The Maldives High Court ordered Turkish firm Turmaks to pay MVR 25 million in unpaid GST for materials used to build Tree Top Hospital. The court upheld MIRA's assessment, rejecting the company's claim that a verbal agreement shifted tax liability. The ruling emphasizes that the burden of proof for tax exemptions lies with the taxpayer.

Newsletter

Get the latest news delivered straight to your inbox