The usable dollar reserves in the central bank are expected to increase by the end of August, the Maldives Monetary Authority (MMA) said on Wednesday, after Adhadhu reported that the reserves had been completely exhausted.
Following Adhadhu's reporting that this is the first time in the country's history that the reserves have fallen to minus, MMA issued a statement saying that the details of the reserve are publicized monthly.
"The Authority will continue to publish information about the reserve on a monthly basis. Maldives' usable reserves are expected to increase by the end of August compared to the end of July," the statement read.
The MMA had earlier warned the Finance Ministry that the usable dollar reserves may run out before the end of August.
According to the latest data released by the MMA, usable reserves fell to USD 43 million at the end of July. The central bank now expects the dollar reserve to be higher than that at the end of August.
The usable dollar reserve is the money kept by the government to pay off loans and spend on essential imports. The reserve consists of dollar revenue received by the Maldives Inland Revenue Authority (MIRA), grants received by the state and budget support.
The reserve is also used to send money needed to cover the expenses of students studying abroad and dollars sold to Maldivians travelling overseas. It is also used to issue dollars to banks and government companies.
The reasons for the fall in the reserves include having to pay back the loans and securities sold to finance expenditures that do not meet the revenue and increasing expenditure on oil and other imports.
The MMA predicted that this situation could arise when the budget was proposed for this year. The MMA told the Budget Committee that difficulties would come if the government did not raise the money needed to cover the budget deficit early in the year.
