The Maldives and India entered into a US$400 million currency swap agreement on Monday as both countries seek to revive relations that were strained after Mohamed Muizzu took office in November last year.
The agreement, signed between the Maldives Monetary Authority (MMA) and the Reserve Bank of India (RBI) under the SAARC Currency Swap Framework for 2024-2027, provides the Maldives access to up to $400 million through the US Dollar/Euro Swap Window and ₹30 billion via the Indian Rupee (INR) Swap Window. The arrangement will remain effective until 18 June 2027.
The SAARC Currency Swap Framework, established on 15 November 2012, aims to provide short-term foreign exchange liquidity to SAARC member countries facing balance of payments challenges or foreign exchange deficits. It serves as a temporary solution until more sustainable financing arrangements can be established.
Ahmed Munawar, Governor of the Maldives Monetary Authority, and Ajay Seth, Secretary of the Department of Economic Affairs at India’s Ministry of Finance, signed the agreement during a ceremony in New Delhi, presided over by Indian Prime Minister Narendra Modi and President Muizzu.
The deal comes at a time when the Maldives is experiencing severe foreign exchange issues and dwindling foreign reserves.
During the ceremony in New Delhi, several key agreements were signed, including a Memorandum of Understanding (MoU) between the National College of Policing and Law Enforcement in the Maldives and India’s Rashtriya Raksha University. Additional agreements included a MoU for cooperation against corruption between the Maldives Anti-Corruption Commission and India’s Central Bureau of Investigation, as well as an extension of a MoU for training Maldivian judicial officers.
Other significant exchanges involved the extension of a MoU for cooperation in sports and youth affairs.
The ceremony also saw the launch of the RuPay card, the handover of 700 housing units built under the Buyer’s Credit facility of EXIM Bank of India, and the inauguration of a new runway at Hanimaadhoo International Airport, all conducted virtually.
In addition, the two countries announced a “Vision for Comprehensive Economic and Maritime Security Partnership” and the refitting of the Huravee Coast Guard ship with Indian assistance.