The Maldives has witnessed a significant boost in its foreign currency reserves, reaching $981 million in total reserves and $179 million in usable reserves by the end of February, according to the Maldives Monetary Authority (MMA). This marks a substantial increase from previous months, reflecting the positive impact of recent economic policies.
Official reserve assets stood at $832.1 million at the end of February, a 17.5% rise from $708.1 million in January. Additionally, the MMA reported $149.6 million in other foreign currency assets invested in Maldivian banks under its control, bringing the total reserves to $981.7 million. After accounting for $802.6 million allocated for short-term financial obligations, usable reserves were calculated at $179 million.
This improvement follows strategic measures implemented by President Dr. Mohamed Muizzu’s administration to stabilize the economy. A notable initiative was the $400 million currency swap agreement with the Reserve Bank of India, which bolstered the central bank’s reserves. Furthermore, the enforcement of the Foreign Exchange Act in October 2024 mandated tourism businesses to exchange a portion of their foreign currency earnings through local banks. This policy led to an increase in dollar circulation within the economy, with resorts exchanging over $50 million, surpassing initial estimates.
In his recent Presidential Address, President Muizzu projected a 6.4% economic growth for 2025, driven by tourism, infrastructure projects, and increased investment. He emphasized the importance of preserving the value of the Maldivian rufiyaa and highlighted that state-owned enterprises would access dollars at the official exchange rate from September 2025, reducing reliance on the parallel market.
The strengthening of foreign reserves is expected to positively influence the Maldives’ credit rating, which had been downgraded due to previous reserve depletions. Experts believe that continued reserve growth, coupled with the government’s fiscal reforms and comprehensive debt strategy, could lead to an improved credit outlook.
These developments underscore President Muizzu’s commitment to economic stabilization and addressing inherited debt challenges, positioning the Maldives on a path toward sustainable growth and financial resilience.
