Summary
Official reserves fell 52.1 percent in four months, from USD 1,331.8m in March 2026 to USD 638.0m in July, after the state repaid the USD 500m sukuk and the USD 400m Reserve Bank of India swap in a single quarter. Usable reserves, the spendable measure, stood at roughly USD 244m at end-April.
Why it matters
Reserves are what defend the 15.42 peg and fund the dollar allocations that Resorts, importers and banks depend on. Thin reserves are the direct cause of the Dollar Shortage and the conversion mandates now imposed on the Tourism Industry. The Governor has accepted reserves are nowhere near the three to four months of import cover a peg needs, and that getting there could take two or three years.
Current situation
In Q2 2026 the state paid external debt service of about USD 983.8m, equal to 73.9 percent of the reserves held when the quarter began, 7.5 times the average of the preceding eleven quarters. Reserves had been rebuilt from a record low of USD 371.2m in September 2024 to about USD 1.03bn by January 2026 before the repayments. Fitch counts USD 535m of sovereign external obligations due in the second half of 2026, more than double the usable reserves on hand at end-April.
Key data
| Indicator | Value | As of | Trend |
|---|---|---|---|
| Official reserve assets | USD 1,331.8m | Mar 2026 | Peak before repayments |
| Official reserve assets | USD 717.9m | Apr 2026 | Down USD 614m in one month |
| Official reserve assets | USD 686.8m | Jun 2026 | Falling |
| Official reserve assets | USD 638.0m | Jul 2026 | Falling |
| Usable reserves (MMA proxy) | about USD 244m | end-Apr 2026 | Thin |
| H2 2026 sovereign external obligations | USD 535m | Fitch, Aug 2026 | Due |
| Q2 external debt service | USD 983.8m | Q2 2026 | 73.9% of opening reserves |
Drivers
- Sukuk repayment (USD 500m) and RBI swap repayment (USD 400m) in Q2 2026; the bulletin shows the swap partly redrawn at MVR 4,800.0m.
- Debt service competing with essential imports for the same dollar pool.
- Conversion mandate inflows partially rebuilding the stock; the mandate delivered USD 523.4m to the MMA from resorts in 2025.
Impact
Falling reserves raise Sovereign Debt Risk and harden FX Regulation, since compelled conversion becomes the state’s main dollar source. The MMA forecasts a current account deficit of USD 627.7m for 2026, roughly the size of the entire July reserve stock, which is the core of the government’s case for urgency.
Related topics
- Sovereign Debt
- Dollar Shortage
- Foreign Exchange
- Maldives Monetary Authority
- Ministry of Finance
- Sovereign Debt Risk