BML says NOP meets required regulatory level

The Bank of Maldives (BML) stated that its net open position (NOP), a measure used to assess a bank’s financial position and exposure to foreign exchange risk, is maintained in line with regulatory requirements.

NOP refers to the difference between a bank’s total foreign currency assets and its total foreign currency liabilities. It indicates the extent to which exposure to exchange rate movements is unhedged and the potential for loss arising from changes in currency values.

The bank noted that NOP is not a measure of its ability to supply foreign currency. Liquidity, by contrast, refers to the bank’s capacity to meet withdrawal requests, process remittances and extend loans within a given period. Both indicators are used in assessing financial position and risk, but they serve different functions.

According to BML, its NOP remained at a low level from December 2020 to September 2024. During that period, the bank recorded a short position of 20 per cent in US dollars, reflecting additional foreign currency sales amounting to USD 200 million by September 2024.

The bank stated that this position exposed it to foreign exchange risk, as depreciation of the Maldivian rufiyaa would have resulted in losses proportional to the short position. It added that this situation was not related to liquidity or the ability to meet customer withdrawals and remittance obligations.

BML said measures were taken in collaboration with relevant authorities to address the short position. These included converting the NOP into a positive position in September last year through business transactions and support from the Ministry of Finance. Since then, the bank has maintained its NOP above the required regulatory threshold.

“At the moment, [NOP] has been maintained at the best level,” the bank said.

The bank also reported that its total business transactions exceeded USD 600 million last year. These included telegraphic transfers and card services for individuals, businesses and corporates.

BML stated that US dollar liquidity is monitored in coordination with stakeholders, supported by funding sources and treasury operations. It expressed confidence in its ability to meet customer and market demand without interruption. The bank added that USD 365 million in new loans had been extended to the tourism sector.

“By the first quarter of 2026, the bank’s net loan portfolio will reach USD 585 million,” BML said.

At the bank’s Annual General Meeting held in March at Barceló Nasandhuraa, Chief Executive Officer and Managing Director Mohamed Shareef stated that the bank’s financial position remained stable. He said the bank recorded its highest results in its 43-year history last year.

He added that these results were achieved through capital and liquidity ratios aligned with the bank’s risk framework, regulatory requirements and international standards.

BML stated that it will continue to maintain financial management practices and uphold the confidence of customers, shareholders and stakeholders.