MMA eases foreign currency reserve requirement to boost dollar liquidity

In a move aimed at easing foreign currency shortages and supporting economic liquidity, the Maldives Monetary Authority (MMA) has lowered the minimum reserve requirement (MRR) for foreign currency deposits from 7.5 percent to 5 percent, effective immediately.

The MRR sets the minimum percentage of customer deposits banks must hold as reserves with the central bank — in either rufiyaa or foreign currency — and cannot be used for lending or investment. These reserves serve as a critical financial buffer, ensuring systemic stability and helping control the money supply.

The central bank also confirmed it will continue to offer targeted support to those most in need of foreign currency access.

Key details of the reserve adjustment:

- Foreign currency MRR reduced to 5%

- Rufiyaa MRR remains unchanged

- Banks will earn 1% interest on rufiyaa reserves

- Banks will earn 0.01% interest on dollar reserves

While the MRR on local currency remains steady, the interest return on reserve balances offers banks a marginal benefit — one that also reinforces the MMA's dual goals of preserving monetary discipline while addressing liquidity constraints.

This move comes amid continued efforts by authorities to strengthen the financial system, manage inflationary pressures, and support broader economic stability during the current transition phase.