MMA Tightens Monetary Policy to Reduce Excess MVR Liquidity

MMA has decided to raise the MVR Minimum Reserve Requirement from 10.5 percent to 11.0 percent, effective from September 2026.

Mohamed Hilmy

07 August 2026, 16:23

Maldives Monetary Authority (MMA) has announced further monetary policy tightening measures aimed at reducing excess Maldivian Rufiyaa (MVR) liquidity circulating in the economy.

As part of the measures approved by the MMA Board, the central bank will increase the Minimum Reserve Requirement (MRR) for Rufiyaa deposits and strengthen its use of Open Market Operations (OMO) to absorb surplus liquidity from the banking system.

MMA has decided to raise the MVR Minimum Reserve Requirement from 10.5 percent to 11.0 percent, effective from September 2026.

The authority also plans to gradually increase the reserve requirement throughout 2027. Following quarterly reviews by the MMA Board, the MVR MRR will be raised incrementally, with the rate expected to reach 13.0 percent by December 2027.

In addition, the MMA has decided to increase its Open Market Operations rate by 10 basis points as part of efforts to further tighten monetary conditions.

The MMA resumed Open Market Operations in July 2025. Between then and July 2026, an average of MVR 2.7 billion in excess Rufiyaa liquidity was absorbed from the banking system through OMOs.

As a result, short-term excess liquidity in the banking system declined from MVR 6.5 billion to MVR 3.7 billion.

The measures are intended to further reduce surplus Rufiyaa liquidity and strengthen the effectiveness of the MMA's monetary policy operations.

MMA Tightens Monetary Policy to Reduce Excess MVR Liquidity

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