Maldives Usable Reserves Drop by USD 42.8 Million in One Month, MMA Reports

The latest monthly update from the Maldives Monetary Authority (MMA) has revealed a substantial decrease in the country’s usable reserves, which have dropped by USD 42.8 million within a month, leaving the balance at USD 73.1 million.

According to the figures, the official reserve assets were at USD 622.1 million in April this year, with usable reserves amounting to USD 113.6 million after deducting USD 508.5 million for planned outflows. However, in May, official reserve assets declined to USD 492.2 million, marking a 20.8 percent decrease. This resulted in usable reserves plunging to USD 73.1 million after accounting for the planned outflow of USD 419.1 million. This amount is only sufficient to cover one month’s imports of essentials such as staples, fuel, and medication.

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This represents a 50 percent drop from May 2023, when usable reserves stood at USD 147.7 million. Comparatively, the reserves were at USD 178.7 million by the end of 2023. The current figure of USD 492.2 million marks the lowest point for official reserve assets in 2024, with the previous low being USD 552.2 million in October 2023.

The announcement comes as Minister of Finance Dr Mohamed Shafeeq revealed that the government is facing significant challenges in seeking financing to address this year’s budget deficit of MVR 14 billion.

While this year’s total budget stands at MVR 49.8 billion, seventy percent of this amount is allocated to recurrent costs. As of now, MVR 18 billion has been expended from the budget, while MVR 15 billion has been generated as revenue.

In response to the country’s economic situation, the government of Maldives is implementing serious cost-cutting measures, including reducing the number of political appointees and refraining from participating in major celebratory events on various occasions.