MMA aims to increase dollar sales to SMEs by 50 percent

The Maldives Monetory Authority (MMA) has announced it deposited USD 364 million in dollar reserves as of June 2025, as part of its efforts to manage foreign currency liquidity under the revised Foreign Exchange Act.

According to MMA, the demand for dollars by local businesses rose 14 percent in the first half of this year, compared to that of last year, prompting the agency to increase dollar sales to meet market needs.

“With the latest amendments to the Foreign Exchange Act, 30 percent of dollars sold through banks will now be directed to small and medium enterprises (SMEs), our goal is to increase that figure to 50 percent in the near future” stated MMA spokesperson.

The government’s external debt obligations also saw a sharp increase, with USD 174 million repaid from January to June 2025—a 51 percent rise compared to USD 88 million during the same period last year. The increase in debt service has placed additional pressure on the central bank’s reserves.

Despite the outflows, the MMA reported a two percent month-on-month rise in official reserves, reaching USD 832 million by the end of June.

The Foreign Exchange Act appears to be influencing broader market dynamics.

The share of foreign exchange inflows routed through banks—previously stagnant at around 10 percent for four years—has more than doubled to 21 percent since the Act’s implementation this year. But at the end of June, official reserves rose two percent to USD 832 million from the previous month.

Key dollar figures:

● Bank deposits as of June: USD 364 million

● Debt repayment this year: USD 174 million

● Debt repayment costs last year: USD 88 million

The central bank also reported a notable improvement in how foreign exchange enters the financial system. For the past four years, only around 10 percent of foreign currency inflows were processed through local banks. However, that figure has more than doubled to 21 percent so far in 2025, following the enactment of the new Foreign Exchange Act.

In 2024, the MMA injected USD 998 million into the domestic market—of which USD 346 million was directed to banks and MVR 652 million to government-owned companies. This marked a one percent increase from the previous year.