State reserves are expected to increase by US$705 million next year, spurred on by the recent change in foreign exchange regulations by the Maldives Monetary Authority (MMA), according to National Budget 2025 projections by the Ministry of Finance.
New exchange rules established by the MMA last October mandate resorts to exchange US$500 per guest via a Maldivian bank or other authorised money changer during their visit to the Maldives — guesthouses are required to exchange US$25 per guest.
While official reserves stood at US$615 million at the end of last month, reserves are expected to reach US$654 million by the end of this year.
Official reserves were at US$590 million at the end of last year.
The MMA entered into a US$400 million currency swap facility with the Reserve Bank of India (RBI) late last month to address the current foreign reserve shortfalls.
Although the proceeds from swap facilities are usually invested with foreign banks, the US$120 million resulting from the agreement has been invested with Maldivian banks, the MMA said.
Despite the increase in official reserves, usable reserves fell by US$17 million over the previous month, standing at US$32 million. This was the biggest decline in the Maldives’ usable reserves in the past three years. Usable reserves had fallen to US$45 million in August.
The steep decline in useable reserves has been attributed to the significant increase in US dollar expenditure.
