Usable reserves in the Maldives fell to USD 190 million in August, marking a 7 percent decline from July, according to the latest data released by the Maldives Monetary Authority (MMA).
Rising Imports and Debt Repayments Drive Reserve Drop
The decline in usable reserves was primarily influenced by a surge in imports and debt repayments. Short-term net outflows reached USD 736 million in August, a 7 percent increase from the previous month.
However, when compared to August 2024, the decrease is far less severe, representing a 90 percent improvement over last year’s levels. In July, usable reserves had stood at USD 213 million.
Official Reserves Remain Stable
Despite the drop in usable reserves, the country’s official reserves showed a modest increase, rising 4 percent to USD 810 million in August from USD 775 million in July. The highest official reserve level this year was recorded in April at USD 856 million, while the lowest was in January at USD 708 million. On average, official reserves have fluctuated between USD 700 million and USD 800 million throughout 2025.
Debt Servicing Continues to Strain Reserves
MMA has previously flagged the impact of debt repayments on the nation’s reserves. As of July, around 60 percent of reserve spending was directed toward debt servicing, with USD 213 million (MVR 3.3 billion) allocated for repayment obligations. During the same period, the State Trading Organization (STO) spent USD 274 million (MVR 4.2 billion) on essential imports such as fuel and medicine.
Tourism-related taxes and fees continue to be the largest source of inflows into the reserves, helping offset some of the pressures on the country’s finances.
Measures to Ease Reserve Pressures
To stabilize the reserves, MMA has utilized its currency swap facility with the Reserve Bank of India (RBI), drawing USD 400 million so far and preparing to access an additional 30 billion Indian Rupees (approximately USD 343 million).
The central bank has also taken steps to boost liquidity by amending the Foreign Exchange Act and increasing the volume of U.S. dollars deposited with local banks. By July, domestic banks had exchanged USD 247.2 million with MMA, strengthening available foreign currency reserves.
