The Maldives' usable foreign currency reserves saw a substantial increase in May, reaching USD 217 million, according to data released by the Maldives Monetary Authority (MMA). This 27 percent rise from April highlights a notable improvement in short-term liquidity.
The central bank reported that usable reserves stood at USD 171.3 million in April before climbing to USD 217.88 million by the end of May, a gain of USD 46.58 million within a month. The broader picture, however, reflects a contrast, as overall official reserves fell 5 percent, from USD 865.34 million in April to USD 815.82 million by the end of May.
With pressures on reserve levels persisting, the government has introduced measures to reinforce foreign currency holdings. A legislation passed earlier this year mandates that a portion of tourism sector revenue be exchanged through domestic banks. Initially, banks were required to sell 60 percent of these funds to the MMA, but an amendment that took effect on 1 June raised this threshold to 90 percent, ensuring a greater influx of foreign currency into official reserves.
The timing of these developments coincides with Fitch Ratings' reaffirmation of the Maldives' credit rating at CC, maintaining its previous assessment. Analysts have long pointed to fluctuations in foreign currency reserves as a critical factor influencing adjustments to the nation’s credit standing.