Maldives Monetary Authority (MMA) confirms reserve money observed an annual decline of 7% by the end of September 2022.
This increment comes after registering a drop of 4% by the end of August 2022. The decline was felt owing to the drop in net foreign assets, despite a surge in net domestic assets during the period.
Net foreign assets declined due to the significant drop in foreign asset accumulation, despite the decline in foreign liabilities “which largely reflected the base effect of the repayment of the foreign exchange” swap with Reserve Bank of India (RBI). On the other hand, net domestic assets registered a growth due to the significant bump in net claims on central government, despite the increase in overnight deposit facility (ODF) placements by commercial banks, which followed a fall in claims on commercial banks.
Moreover, annual broad money growth decelerated to 11% by end of September 2022, from 15% in August 2022.
The annual growth in board money drove up by the increment in quasi-money, mainly due to substantial growth in transferable deposits denominated in foreign currency. Additionally, due to the increment in time deposits denominated in both local and foreign currency.
Furthermore, savings deposits denominated in local currency saw growth, followed by marginal growth in savings deposits denominated in foreign currency. Narrow money remained relatively unchanged.
Broad money growth came mainly from the rise in net domestic assets, largely due to the rise in net claims on central government by commercial banks and MMA. Credit to public nonfinancial corporations saw increment as well.
Meanwhile, net foreign assets saw a marginal increase, owing to the decline in foreign liabilities. This came despite the decline in foreign asset accumulation during the period.