State Reserves drop by MVR51.8 million, to MVR5.13 billion

The Central Bank Maldives Monetary Authority’s (MMA) Statement of Financial Position as at 31 July 2012 has revealed that its Reserve, or the ‘total foreign currency financial assets’, dropped by MVR51.8 million in one month, to MVR5.13 billion.

The Statement of Financial Position one month ago, as at 28 June 2012, showed that the Reserves stood at MVR5.19 billion.

The notes included in the statements indicate that increases and decreases in the State Reserves are results of the changing prices of gold, foreign currency, and Rufiya.

One reason shown in the statements for the reduction in the Reserve is the decrease in foreign currency cheques received by local banks. These cheques are exchanged to local currency by MMA.

The amount for ‘cheques for collection’ went down from MVR101.9 million at the end of June to MVR3.8 million at the end of July 2012.

The Central Bank’s General Reserve also went down from MVR412.4 million at the end of June to MVR399.1 million at the end of July 2012.

Regulations of MMA stipulate that 50 percent of the bank’s profits must be held as Reserves. According to the notes which came with the statements, the bank’s Reserves were double the required amount.

The Chief of an International Monetary Fund (IMF) delegation which visited Maldives in April 2012, Jonathan Dunn, said after reviewing the Maldives’ economy that because Maldives is dependent on imports, increased State expenditures may result in the State Reserves running out of money completely.