AUTHORITY

The Maldives Monetary Authority is the central bank of the Maldives and the main regulator of the financial sector. It was established on 1st July 1981, under the mandate provided by the MMA Act (1981)

Monetary Policy

The MMA is responsible for the formulation and implementation of monetary policy in the Maldives. Under the MMA Act (1981), the main objective of monetary policy is to achieve price stability and to maintain an adequate level of foreign exchange reserves. Under the current monetary policy framework, the MMA uses a fixed exchange rate system with the US dollar as an intermediate target to achieve its policy objective, and in turn intervenes in the foreign exchange market to keep the exchange rate pegged within a stipulated band.

The main monetary policy instruments of the MMA are the minimum reserve requirement, open market operations, foreign currency swaps and the standing facilities: the overnight deposit facility and the overnight lombard facility.

All monetary policy decisions are made by the Board of Directors of the MMA after reviewing the macroeconomic conditions and recommendations made by the Monetary Policy Committee of the Authority.

The key functions of the MMA are as outlined below:

Issue and regulate the availability of the Maldivian rufiyaa

License, supervise and regulate the financial sector

Maintain price stability

Advise the government on banking and monetary matters