Cash in Maldives economy hikes by 4% in 4 years, MMA says
Especially after the Covid outbreak, businesses also preferred digital payments, the MMA report said.
By
Aishath Fareeha Abdulla
The amount of cash in circulation in the country's economy has increased by 4%, amounting to MVR 3.7 billion, according to Maldives Monetary Authority (MMA).
The central bank said in its payments bulletin that between 2019 and 2022, the amount of cash in circulation in the country grew by 4% to MVR 3.7 billion.
The report notes that cash withdrawals from banks have increased with the outbreak of Covid-19 in early 2020.
The measure, which was then taken to prevent a cash shortage in the economy and improve banks’ reserves, led to a 9.5% increase in the amount of currency in circulation in 2019-2020.
However, the central bank noted that the use of cash among the public decreased and the use of digital payments increased during the period.
Especially after the outbreak, businesses also preferred digital payments, the MMA report said. They also noted;
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The demand for small notes is very low
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By 2022, cash withdrawal transactions of MVR 32 billion have been made
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14% less withdrawals through ATM/POS for 2019-2022. However, the amount of withdrawals increased by 7%
Cash circulation has been at different levels at different times, but the circulation of small change has increased now. According to the MMA report, between 2019 and 2022, there was a 5% increase in the small change circulation in the economy.
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In 2019, MVR 75.9 million was circulated as small change
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By 2022, that number will rise to 79.8 million
Most people transact money through transfers
The central bank's report said bank transfers are the most commonly used method of transacting money in Maldives.
These include transactions from one bank account to another and different accounts within same bank. The MMA report said:
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In 2022, 88.9 million bank transfers were made
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That’s a total number of transactions totalling MVR 563.2 billion
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95% of transfer transactions are made using internet banking or banks' applications
