Finance Ministry: Enough money in reserves to cover imports, weather external economic shocks

The Maldives has enough money in its official reserves to cover imports and overcome external economic shocks, said the Finance Ministry on early Sunday, as the military escalation in the Gulf continues to disrupt travel and trade, raising fears over its impact on the already vulnerable Maldivian economy.

In a statement issued just after midnight, the Finance Ministry said it is working with other relevant agencies to closely monitor the potential impact of the Gulf conflict on the Maldives’ financial and economic situation.

“We provide assurance that this ministry will be engaged in continuous efforts to prepare for the risks this situation poses on the Maldives and implement speedy measures,” added the ministry.

The ministry said that the latest data released by the Maldives Monetary Authority (MMA) shows the Maldives’ reserves is the highest it has ever been, which will be “of great help to the government in implementing effective economic measures to overcome external economic shocks and finance imports.”

Another key concern the current conflict raises is the supply of fuel.

Addressing this, the ministry said that the main route for fuel supplies into the Maldives is Oman, and that measures are being taken in collaboration with the State Trading Organization (STO) to identify potential disruptions to the supply chain and ensure a steady supply of fuel.

The Finance Ministry added that it is also conducting extensive analysis of the potential impact of the current conflict on global travel and tourism arrivals to the Maldives.

“We plan on implementing necessary changes to financial policies based on this analysis, in order to maintain Maldives’ macroeconomic stability and ensure continuation of public services,” said the ministry.

The ministry provided assurance it will take all necessary measures to uphold Maldives’ financial stability and confidence in the country’s economy.

The Maldives is heavily dependent on tourism and imports. Experts warn that if the current Gulf conflict drags on, the economic cost to Maldives could be far worse than Covid-19 pandemic.