Data released by the Maldives Monetary Authority (MMA) has shown that usable reserves increased at the end of November by including investments in banks after the currency swap with India.
MMA's Financial Position Report for November shows that the official reserves stood at USD 616 million. The amount invested in banks is USD 128 million. It is believed that the amount was added as interest on the money previously invested.
The proceeds of currency swap agreements were previously invested in foreign banks. However, MMA said some of the money was invested in two local banks this time to maximize profits, facilitate the growth and stability of the financial sector and benefit the entire economy.
The central bank says it now calculates usable reserves by including money invested in banks. So after deducting the predetermined short-term net drains, the amount in the usable reserves is USD 45 million. This is an increase of USD 14 million compared to November.
Changes in usable reserve
- June: USD 66.9 million
- July: USD 43.6 million
- August: USD 61.2 million
- September: USD 48.8 million
- October: USD 31.5 million
- November: USD 45.7 million
But the amount in the usable reserves is USD -72 million after excluding the amount of money invested in banks.
The USD 45 million in usable reserves is not enough for the imports of one month. Reserves had been below USD 50 million for the past three months.
However, the reserves are expected to improve during the next year because of policy changes that require tourism businesses to exchange dollars with the central bank and increased taxes and fees on tourism businesses.
