Govt to Increase Reserves to USD 705 Million by End of this Fiscal Year

The government’s goal is to increase the state reserve to USD 705.1 million by the end of the year, President Dr Mohamed Muizzu said today.

Delivering the presidential address at the opening ceremony of the first term of the parliament today, the President said that it was necessary to maintain the value of the Maldivian Rufiyaa and find a permanent solution to the problems faced by the foreign exchange market. He said the amendments to the Foreign Exchange Act will have an impact on the state’s reserves and the lives of the citizens.

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He also said that from September this year, state-run business companies will start receiving Dollars at official rates without going to the parallel market (black market) and from the first quarter of this year, the amount of Dollars received by the bank will be doubled for every citizen leaving the country. He said the limits on credit cards would be increased to USD 1,400 in the second quarter.  Currently, Maldivians who depart from the country are able to obtain USD 500 per outbound ticket. The limit for credit cards is USD 700.

He also said that the amount of dollars issued by banks to business owners for TT to import goods into the Maldives will also be increased from January 2026. However, it is not clear to what extent the increase will be.

He said loans worth MVR 198 million was disbursed to 374 small and medium enterprises last year. Interest on loans given due to COVID-19 has been completely waived, adding that the repayment period has been extended from eight years to 10 years, which resulted in MVR 55 million being waived off of 2,133 individuals.

“As of November 17, 2024, out of the 322 borrowers who have repaid their loans, 316 have been refunded MVR 3.36 million as interest amount paid by them earlier,” he said.

He said the government was also working on setting up a Unified Payment Interface (UPI) with the National Payments Corporation of India in the country as part of efforts to facilitate foreign financial transactions. Earlier, the government had made Indian RuPay cards available in the country.

He said the Government of Maldives have signed a memorandum of understanding (MoU) with The People’s Bank of China to facilitate financial convenience for businesses. Similarly, an agreement was signed with the Reserve Bank of India to facilitate transactions in the Indian Rupee. 

“These agreements will facilitate direct cash transactions with local businesses and Chinese and Indian businesses in local currency,” he said.

He said that despite the increase in the state’s revenues, the financial situation of the country still faces serious challenges and he wants to put an end to the systemically structured practice of running public expenditure more than what is earned. Therefore, with cost-cutting measures in place, the aim is to reduce the deficit in a big way this year and reduce the government’s borrowings, he added.

In his 2025 presidential address, he said the government is committed to increasing the share of the ICT sector in the country’s manufacturing standards to 15 percent by 2030 and providing the benefits of the digital economy to the local people.

Highlighting the issue of the tourism industry, he said the target is to attract 2.3 million travellers to the Maldives by the end of this year and a lot of efforts are already underway to achieve this goal. More wide-body aircraft are expected to arrive in October this year, he said, adding that this will also allow some destinations in Europe to start flying directly by the national carrier.