MMA Boosts Weekly Dollar Allocation by 51 Percent to Ease Liquidity

The Maldives Monetary Authority (MMA) has increased the weekly allocation of US dollars to commercial banks by 51 percent to improve liquidity and simplify access to foreign currency within the banking system. The measure, which takes effect this week and will remain active for the next three weeks, is specifically designed to alleviate the financial strain on businesses. By increasing the available foreign exchange, the central bank aims to resolve the difficulties importers face when securing the funds necessary to bring essential goods into the country. According to the MMA, this decision follows a noticeable decline in US dollar inflows since February. The central bank attributed this shortage to geopolitical disruptions in the Middle East, which have negatively impacted the tourism industry—the primary driver of foreign currency for the Maldivian economy. This is not the first time the MMA has intervened to stabilize the foreign exchange market this year. In February, the authority increased dollar allocations by 32 percent to ensure a steady supply of essential food items ahead of Ramadan, a move intended to prevent price inflation during the holy month. Further support was provided in June, when the MMA raised weekly allocations by 26 percent. That intervention was aimed at supporting businesses during the tourism off-season, a period traditionally characterized by lower foreign currency reserves. Through these successive measures, the MMA continues to manage the volatility of the foreign exchange market, balancing the needs of the import sector against the fluctuating trends of the tourism industry to maintain national economic stability.