Official gross foreign reserves of the Maldives declined to $547.7 million at the end of September, primarily driven by a substantial increase in foreign currency sales to service external debt obligations and meet market demand, according to the latest data released by the Maldives Monetary Authority (MMA). The reserve figure marks a 14.9 percent month-on-month decrease from the $643.9 million recorded at the close of August.
In line with the decline in gross reserves, the nation's usable reserves also contracted during the period. Usable reserves dropped from $200.6 million at the end of August to $167.7 million by the conclusion of September, representing a 15.4 percent reduction.
The central bank confirmed that the principal factor behind the drop was that total foreign currency sales during September exceeded total receipts. Foreign currency disbursements surged significantly, with the MMA’s sales of foreign exchange rising by 46.9 percent compared to the volume sold throughout the preceding month.
A major contributor to the elevated foreign currency outflow was the settlement of sovereign debt commitments. The government utilized foreign exchange provided by the central bank to pay off the remaining $50 million of a $150 million Treasury bill issued via the State Bank of India (SBI) in 2019 for budget support. In addition, the central bank continued its routine interventions to ease pressures in the foreign exchange market and supply commercial banks with dollars for public and commercial needs.
Under national foreign exchange regulations, commercial banks acquire foreign currency generated through mandatory per-tourist surrender rules, selling 90 percent of those proceeds to the MMA. The central bank utilizes these inflows to support commercial banks in satisfying market demand while deploying remaining balances to maintain and build the country's official reserve buffer.