MMA increases USD supply to banks amid rising demand and weakening inflows

The Maldives Monetary Authority (MMA) has increased the amount of US dollars issued to banks by 25 percent during the tourist off season, in a move aimed at easing pressure in the foreign exchange market.

According to the central bank, the weekly allocation of dollars to commercial banks will be raised by 25 percent for the next three months, starting Tuesday. MMA said the decision was taken as foreign‑exchange inflows typically decline during the off‑season while demand for remittances and essential payments remains steady.

The authority said the measure is intended to alleviate the FX shortage in the banking system and ensure easier access to dollars for priority needs.

MMA noted that dollar sales through banks for business and public purposes have already risen sharply this year. In the first five months of 2026, banks sold 78 percent more dollars for medical travel and education compared to the same period last year. Overall dollar sales for business and public use increased by 72 percent over the same period.

However, despite higher allocations, foreign‑exchange inflows have weakened, widening the gap between supply and demand. As a result, the dollar has traded above MVR 20 on the parallel market for several days, a continuation of the structural dollar pressure that resurfaces each off‑season.

Banks have also tightened controls in response to rising demand. Bank of Maldives (BML) imposed limits last month on e‑commerce and online foreign transactions made with Maldivian rufiyaa cards, citing pressure on dollar liquidity. The bank has since announced that these limits will be eased before the end of the month.

MMA’s latest intervention follows a pattern seen in recent years, where the central bank injects additional dollars during periods of low tourism revenue to stabilise the market. The authority previously supplied 72 million USD to banks in the first quarter of 2025 and 78 million USD in the first quarter of 2026.