The economic report for the month of September 2019, from Maldives Monetary Authority (MMA) indicated that the country’s reserve money declined by 10% in August 2019.
The negative growth rate of reserve money since June of the current year continued into the reviewed month of August as well. This drop was largely attributed to the annual fall in net foreign assets of the MMA by 4% due to decrease in foreign currency deposits of commercial banks at the authority.
The net domestic assets of MMA declined annually by 6% in August 2019 and contributed to the negative growth in reserve money.
The usable reserve on August 2019 was at USD248.4 million, which fell by 5% from USD276.4 million in July – and also marks the lowest the usable reserve has declined in 2019 so far.
Throughout the year, the usable reserve was on a declining trend since the first quarter and until June 2019 of the second quarter and it was expected that an upward trend will form.
August also marks the lowest the Gross International Reserves (GIR) has fallen, as it was valued at USD612.1 million compared to the USD644.1 million in July.
The highest in GIR was observed during the first quarter, on the month of February when it was at USD938.6 million, and the trend was mixed for the first quarter it was on a declining trend during the second quarter.
Following the hike in GIR on February, the significant drop to USD776.2 million was majorly attributed to the payment of USD100 million as currency swap to Reserve Bank of India (RBI).
For the months of April, May and June 2019 the GIR was observed at USD778.0 million, USD766.7 million and USD677.4 million, respectively.
While the usable reserve is currently observing a decline in the trend, the Maldives President Ibrahim Mohamed Solih during his Presidential Address assured the state reserve will be increased to USD1 billion by the end of his presidential term in 2023.