Maldives central bank denies zero reserves report; says to hike in Aug
MMA made the remarks in a statement following newspaper reports that if a $25 million oil is paid on its due date of Wednesday, the reserves will run out.
Maldives usable dollar reserves are not exhausted and will increase by the end of this month, the central bank said Wednesday.
The Monetary Authority of Maldives (MMA) made the remarks in a statement following newspaper reports that if a $25 million oil import bill is paid on its due date of Wednesday, the reserves will run out.
The MMA denied the reports saying they were untrue and false and that it was concerned about the untruthfulness of such reports.
"The authority continues to publish reserve data on a monthly basis. Maldives' usable reserves are expected to increase by August from the level at the end of July," the MMA said in the statement.
However, the central bank recently forecast that the usable reserves of the country will be exhausted this month.
The purpose of the reserve is to import essential commodities such as oil and medicines. A country's foreign currency reserves are a measure of the country's economic and financial situation.
A copy of a letter sent by the MMA to the finance ministry late last month expressed concern over the depletion of Maldives' usable reserves.
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The ministry has already sent the letter to some government companies that earn foreign currency
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The letter, in consolidation, asked the finance ministry to deposit foreign exchange earnings directly through the MMA and take measures to keep foreign exchange in the treasury
The MMA letter said that as of July 24, the official reserves stood at $365.44 million, while the usable reserves stood at $21.97 million. The letter states:
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According to estimates, usable reserves are expected to fall to $17.6 million by the end of last month
"In addition, according to the official reserve estimates prepared by the authority in July, usable reserves are expected to decline to $17.6 million by the end of July and will run out from August," the MMA said in the letter.
The finance ministry issued a letter last week asking companies to stop paying salaries in dollars.
Maldives needs $70 million a month to import essential commodities. Therefore, the latest reserve numbers released by the MMA show that it is enough money to import goods for 0.9 months.
According to statistics, Maldives needs $508 million this year to repay foreign loans.
