The Maldives Monetary Authority (MMA) announced today that it has absorbed MVR 3 billion from the banking system to support and maintain the value of the Maldivian Rufiyaa.

According to the central bank, "Reverse Repurchase Operations" were resumed on July 23 last year after a hiatus of more than a decade.

This measure was implemented to alleviate downward pressure on the Rufiyaa's exchange rate caused by surplus local currency liquidity in the market, which had been driving up foreign currency demand.

As a result, surplus Rufiyaa liquidity in the banking system was reduced by 39 percent by the end of June, MMA noted.

The central bank detailed that while surplus liquidity averaged around MVR 7 billion in June of last year, the figure dropped to approximately MVR 4 billion by the end of June this year.

MMA further stated that it launched Main Liquidity Operations (MLO) in December last year, having raised interest rates across all tenors of Structural Liquidity Operations by 100 basis points in November, followed by an additional 10 basis point hike this August.