The Maldives’ official reserves, inclusive of the usable reserve and the Sovereign Development Fund (SDF), are projected to reach above USD 606 million by the end of 2024, forecasts the Maldives Monetary Authority (MMA).
This comes not long after the global credit rating agency, Fitch Ratings, downgraded the Maldives’ credit rating from ‘CCC+’ to ‘CC’, highlighting the Maldives’ close proximity to default.
MMA, in a press statement on Thursday said, there are considerable factors while drawing comparison of the balance of reserves between July 2023 and July this year.
The central bank notes that reserves had USD 395 million in July 2024, including a USD 45 million in the usable reserve. In the same month last year, the country’s reserves stood at USD 594 million, including a USD 100 million currency swap from the Reserve Bank of India (RBI).
“And the usable reserve had USD 129 million. This figure includes the US dollars that was being accumulated to the sovereign development fund since December 2019 which was exchanged allowed to be used for the reserve,” the central bank said in the statement.
MMA added that the SDF depleted to USD 5 million in November 2023, but has since bounced up to USD 65 million.
“The main reason for this is the decision to stop the exchange of the US dollars that is sent to the sovereign fund. And we note that there was USD 105 million at the end of July 2024, including the balance of the usable reserve,” MMA added.
The central bank is involved in additional efforts to boost reserves, including working with the government to refinance green bond. It added that it was close to signing a USD 400 million currency swap agreement with the RBI.