The Maldives' foreign currency position continues to show signs of resilience despite a decline in official reserves, with the Maldives Monetary Authority (MMA) projecting a stronger reserve position by the end of the year, while the Bank of Maldives (BML) says dollar liquidity remains sufficient to meet growing demand across the economy.
According to the MMA's latest statistics, the country's official foreign exchange reserves stood at USD 686.8 million at the end of June, reflecting a decline of USD 18 million compared with May and USD 145.6 million lower than the level recorded in June last year.
However, the country's usable reserves—which are calculated after deducting foreign exchange liabilities due within the next 12 months—stood at USD 248.9 million. Although this represented a monthly decline of USD 11.9 million, it marked an increase of approximately 23 percent compared with USD 203 million in June 2025, indicating an improvement in the country's immediately available foreign currency position over the past year.
The central bank attributed the latest fall in official reserves to increased foreign exchange outflows, particularly under its market intervention programme. Dollar sales by the MMA rose by 43 percent during the month as stronger demand from commercial banks and importers required additional support from the central bank.
The figures also show that official reserves reached a record USD 1.3 billion in March this year before gradually declining, with the sharpest monthly fall occurring in April. Despite the recent decrease, the MMA remains optimistic and forecasts that official reserves will recover to around USD 904 million by the end of 2026 as ongoing economic and fiscal measures continue to strengthen the country's external position.
Supporting that outlook, the World Bank's Maldives Development Update 2026 noted that the government's fiscal reforms have significantly narrowed the gap between state revenue and expenditure. The fiscal deficit has declined to approximately USD 330.7 million, equivalent to 4.3 percent of GDP, driven by stronger revenue collection and tighter expenditure controls.
The government's debt management strategy has also played a key role in improving external financial stability.
President Dr Mohamed Muizzu recently announced that his administration has repaid USD 1.29 billion in external debt since assuming office. This includes USD 891 million inherited from the previous administration, USD 195 million from earlier governments, and an additional USD 62.5 million in debt accumulated during the administrations of former Presidents Mohamed Nasheed and Mohamed Waheed Hassan.
Meanwhile, the country's largest commercial bank says the availability of foreign currency within the banking system continues to improve.
Speaking at the opening of the Youth Entrepreneurs Expo, Bank of Maldives Chief Executive Officer Mohamed Shareef said the bank currently maintains sufficient US dollar liquidity and has significantly expanded foreign currency financing to businesses.
According to Shareef, BML issued USD 226 million in US dollar loans during the first six months of this year alone, bringing the bank's total outstanding US dollar lending portfolio to approximately USD 860 million. Most of these loans have supported the tourism industry, which remains the country's largest foreign currency earner and the backbone of the Maldivian economy.
He noted that the pace of dollar lending has accelerated considerably over recent years.
Between 2021 and the end of 2023, the bank issued a combined USD 249 million in US dollar loans. That was followed by USD 142 million in 2024, USD 284 million in 2025, and a further USD 226 million during just the first half of this year, reflecting growing business confidence and increased investment activity.
Shareef also revealed that BML is currently selling more foreign currency than at any point in its history.
Average monthly US dollar sales stood at around USD 21 million in 2021 before increasing to USD 37 million by 2023. This year, the bank is selling approximately USD 80 million every month to customers for a wide range of purposes, including overseas card transactions, business telegraphic transfers, education expenses, medical payments, and cash purchases for travellers.
Addressing concerns over dollar availability, Shareef said the current sales volumes demonstrate that foreign currency remains accessible through the banking system.
He noted that if US dollars were genuinely unavailable, the bank would not be able to sustain monthly sales at current levels.
BML has also expanded access to foreign currency for individuals. The overseas debit card spending limit, which had remained at USD 250 since September 2020, was increased to USD 1,000 from November last year for payments related to goods and services purchased abroad.
In addition, the bank raised the foreign currency allowance for airline tickets, hotel bookings and overseas medical expenses to USD 3,000, with those facilities continuing to be available to customers.
Together, the latest figures from the Maldives Monetary Authority, the government's debt repayment programme, and the Bank of Maldives indicate that while official reserves have eased from earlier record levels due to increased market interventions, broader efforts to strengthen fiscal discipline, reduce debt obligations, improve usable reserves and expand access to foreign currency continue to reinforce confidence in the country's external financial position.
