The Maldives' official foreign exchange reserves declined to USD 686.8 million at the end of June, down from USD 704.8 million in May, the latest statistics released by the Maldives Monetary Authority (MMA) show.

The figure represents a monthly decrease of USD 18 million, while official reserves fell by USD 145.6 million, or 17.5 per cent, compared with June last year.

Usable reserves also declined month-on-month, falling by USD 11.9 million to USD 248.9 million at the end of June. However, usable reserves were 23 per cent higher than the USD 203 million recorded in June last year.

The MMA attributed the decline in gross reserves mainly to higher foreign currency spending, driven by increased demand for foreign exchange from the banking sector and importers. The central bank also increased its dollar sales to the market by 43 per cent compared with May to meet this demand, placing additional pressure on reserves.

The authority noted that the sharp fall in reserves this year was also influenced by the Government's repayment of USD 524.68 million in Sukuk in April, as well as the repayment of the USD 400 million currency swap facility provided by India.