Reserve decline not shocking, governor says
According to MMA data, the country's total reserves fell to $540.3 million at the end of September.
Central bank Governor Ali Hashim has said that the country's official reserves are declining due to economic challenges, but it is not a "shocking" change.
When Governor Ali Hashim arrived at the parliamentary committee reviewing the budget on Sunday, one of the main concerns of the members was the depleting official reserves of the country. The members sought the governor's opinion on the issue.
Reacting to the concern, the governor said:
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In terms of numbers, the country's reserves remain the same
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There is always money in the country's reserves to import essential goods for 2-3 months
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Reserves have not been below it in the last few months
"We have never had more than three months' worth of imports in the reserves. That average is being kept. It's not shocking" Ali Hashim said.
According to MMA data, the country's total reserves fell to $540.3 million at the end of September. The country's reserves have been declining month-on-month since June.
At the start of the year, the total reserves stood at $327 million
MMA data shows:
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After deducting the short-term debt, which is $346.8 million, $193.5 million (MVR 2.9 billion) remain in usable reserves
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The reason for the decline in reserves now is that the price of oil has increased and the amount required to import oil has gone up
According to customs data, the country needs an average of MVR 1 billion a month to import staple foods, oil and medicines. The MVR 2.9 billion in reserves is enough to import essential goods for three months
In recent times, the state's official reserves fell the most in 2016 under president Abdulla Yameen Abdul Gayoom. At the end of the year, the reserves stood at $467.3 million. This happened because the state had to pay a major compensation to India's GMR for terminating the airport agreement.
