After an increase in foreign exchange reserves at the end of August, both total reserves and usable reserves declined at the end of September, according to figures from the Maldives Monetary Authority (MMA).

Gross international reserves stood at USD 322 million at the end of last month. This is USD 72 million less than the previous month.

After deducting the required portions from the total reserves, the usable reserves stood at USD 49 million. This is USD 12 million less than the USD 61 million in usable reserves at the end of August. It barely covers essential imports for a month.

Although reserves declined at the end of last month, they are expected to improve during the current month. The MMA signed a USD 400 million currency swap facility with the Reserve Bank of India (RBI) yesterday.

The currency swap agreement signed between Maldives and India will provide Maldives with 400 million dollars or euros as well as 30 billion Indian rupees, the MMA said.

"While the dollar/euro swap facility is a measure to support short-term foreign exchange needs, the Indian rupee swap facility will facilitate trade transactions between India and Maldives in the respective currencies," the MMA said.

The foreign currency swap facility was arranged under the South Asian Association for Regional Cooperation (SAARC) framework to improve the dollar reserves of the Maldives.