Maldives Monetary Authority (MMA) reported that the annual reserve money (M0) growth accelerated to 29% at the end of September 2021, while annual broad money (M2) growth decelerated by 25% at the same period.
Moreover, reserve money stood at 25% at the end of August 2021 while broad money stood at 26% during the same month.
As per the central bank of the Maldives, growth in the reserve money stemmed from the increase in net foreign assets of the MMA despite registering a decline in the net domestic assets of the bank in the review period.
Furthermore, net foreign assets increased mainly due to the significant push in foreign asset accumulation despite an increase in foreign liabilities.
The increase in foreign liabilities reflect the base effect of an increase in the liabilities in December 2020 while the net domestic assets decline due to the increase in ODF placements by commercial banks. However, this was partially offset by the increase in claims on commercial banks despite the decline in net claims on central government.
Meanwhile, the annual growth in broad money was primarily driven by an increase in quasi-money, owing to the substantial increase in transferable deposits denominated in foreign currency and time deposits denominated in local currency.
In addition to this, increase in savings deposits denominated in both local and foreign currency resulted in the annual increment of broad money as well.