In the first quarter of the year, the Maldives' usable foreign exchange reserves experienced a significant decline, causing concerns over the country's economic stability. The usable reserves dropped from $267 million at the beginning of the year to $200 million by the end of March, leaving enough money for only about two months of imports.
Total reserves also witnessed a decrease during the same period, falling from $827 million to $764 million. This marks the third consecutive decline in usable foreign exchange reserves. Despite these alarming figures, the Maldivian government continues to assert that the reserves are in good shape. At the end of last year, when the reserves deteriorated, the government borrowed $200 million from India to address the shortfall.
Contradicting the government's position, a recent World Bank report has raised concerns about the state of the country's reserves. Meanwhile, government-linked newspapers have been publishing baseless news reports claiming that the foreign exchange reserves have reached record highs.