MMA launches measures to reduce excess MVR 7 billion in circulation
As of June 2025, the total money supply stood at MVR 64.5 billion, a 10.7 per cent increase compared to the same period last year.
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The Maldives Monetary Authority (MMA) has announced a campaign to reduce the excess MVR 7 billion circulating in the economy, citing its impact on the exchange rate and overall monetary stability.
The central bank made the announcement on Thursday through a 12-page statement detailing the steps taken to address monetary concerns. According to the MMA, the amount of Maldivian rufiyaa in circulation has increased significantly due to a combination of factors, including overdrafts from public bank accounts and the conversion of short-term liabilities into long-term bonds during the previous administration.
As of June 2025, the total money supply stood at MVR 64.5 billion, a 10.7 per cent increase compared to the same period last year.
Key points highlighted by the MMA include:
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A 178 per cent increase in liquidity since April 2020 due to overdrafts;
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An 18 per cent year-on-year increase in rupee deposits in banks by June 2025;
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A significant increase in rupee loans, while foreign currency lending has slowed;
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A 20.9 per cent rise in banks’ investments in government securities;
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A 6 per cent increase in loan disbursement to businesses and individuals.
The MMA noted that the disparity between rising rupee activity and slower foreign currency flows has contributed to pressure on the exchange rate, with the rufiyaa currently trading at MVR 20 per US dollar.
To address the excess liquidity, the MMA has reintroduced Open Market Operations (OMO). The central bank conducted its first reverse repurchase operation on 23 July, which it said reduced excess liquidity in the banking system by MVR 2.1 billion.
The MMA stated that additional steps will be taken as necessary to stabilise monetary conditions and maintain the value of the rufiyaa.
