Maldives Trend of Declining Reserves - Risks SL-Like Situation in the Next 2 Years

Abstract

The external reserves of the Maldives have been on a declining trend since June 2020. At that time, the gross reserves held by the Maldives Monetary Authority amounted to USD 702.5 million, sufficient to finance 5.2 months of imports. However, by September 2024, the reserves had fallen to USD 371.2 million, covering only 1.1 months of imports. This situation mirrors what happened in Sri Lanka, which faced its worst economic crisis after its usable external reserves plummeted from USD 6,695 million (6.4 months of imports) in June 2020 to USD 308 million (0.18 months of imports) by April 2022.