Usable dollar reserves run out for the first time in Maldives' history!
1 day ago
MMA. -- Photo: Adhadhu
The state's usable dollar reserve has run out just days after the Maldives Monetary Authority (MMA) sent a warning letter to the Finance Ministry.
This is the first time in the country's history that the reserves have fallen to minus.
The MMA and the Finance Ministry were not available to comment on the matter, but Adhadhu understands that the remaining dollar reserves have been used up today.
Two separate reliable sources confirmed to Adhadhu that the usable dollar reserves are currently at a minus.
A source familiar with the government's finances said the government had a USD 25 million oil bill due today and that the reserves could run out and be at a minus if the bill was paid.
"If it reached minus, today the reserve reached a minus because of the USD 25 million oil bill. That payment cannot be delayed," the source said.
The usable dollar reserve is the money kept by the government to pay off loans and spend on essential imports. The reserve consists of dollar revenue received by the Maldives Inland Revenue Authority (MIRA), grants received by the state and budget support.
The reserve is also used to send money needed to cover the expenses of students studying abroad and dollars sold to Maldivians travelling overseas. It is also used to issue dollars to banks and government companies.
According to the latest data released by the MMA, usable reserves fell to USD 43 million at the end of July.
Experts who spoke to Adhadhu said the Sovereign Development Fund (SDF) may have to be used when there is no way to meet the expenses when the state's dollar reserves run out.
However, both the government and the MMA deny the possibility of facing that situation. The Finance Ministry and the MMA told some local media outlets that the situation would not worsen and that the reserves would stabilize before the end of the month.
Adhadhu - Usable dollar reserves run out for the first time in Maldives' history!