MMA: Usable reserve remains satisfactory despite drop in official reserves in June

Maldives Monetary Authority (MMA) has stated that despite a decline in the country’s official reserves to USD 686.8 million at the end of last month, usable reserves remains at a satisfactory level.

According to the latest statistics released by the central bank on Thursday, official reserves have recorded a cumulative decline of USD 645 million since March, when reserves stood at USD 1,331.8 million.

The largest share of the decline was recorded in April. By the end of June, official reserves had fallen by USD 18 million compared to May. This marks a reduction of USD 145.6 million, or 17.5 percent, compared to the reserve level recorded in June last year.

The MMA attributed the decline in gross reserves in June compared to the previous month primarily to increased foreign currency expenditure. The authority noted that due to heightened demand for foreign currency from the banking sector and importers, the volume of US dollars injected into the market through the MMA’s foreign exchange intervention policy increased by 43 percent compared to the previous month.

The figures reflect the growing foreign currency expenditure required by the central bank to support the stability of the Maldivian Rufiyaa.

Despite the decline in overall reserves, usable reserves stood at USD 248.9 million at the end of last month.

Although this represents a decrease of USD 11.9 million compared to May, the figure remains higher than the level recorded during the same period last year. Usable reserves stood at USD 203 million at the end of June last year, representing an increase of approximately 23 percent year-on-year.