Bank of Maldives Issues Official Statement Clarifying Its Foreign Exchange Position and Affirming Strong Liquidity Standing

Bank of Maldives has issued an official statement to provide clarity and transparency on its Net Open Position in United States Dollars, its management of US dollar liquidity, and the important distinction between these two separate but equally significant financial concepts.

The bank began by drawing a clear line between two terms that are often misunderstood. The Net Open Position (NOP) represents the difference between a bank's foreign currency assets and liabilities at any given point in time, serving as a measure of exposure to exchange rate movements rather than an indicator of immediate cash availability. Liquidity, on the other hand, refers to a bank's ability to meet its short-term obligations as they fall due, including customer withdrawals and payment commitments. While both are critical metrics in assessing a bank's financial health and risk profile, they serve distinctly different purposes.

Bank of Maldives acknowledged that its Net Open Position had been deteriorating since December 2020, and confirmed that by September 2024, its NOP in US dollars had reached a short position of 20%, meaning the bank had oversold approximately USD 200 million at that point in time. The bank clarified that the primary risk associated with this position was the potential for foreign exchange losses in the event of a Maldivian Rufiyaa devaluation, and stressed that this situation had no bearing on the bank's liquidity position or its ability to fulfil customer withdrawals and payment obligations.

The NOP short position was proactively and decisively addressed through a series of coordinated measures. With the strong support of the Ministry of Finance and Planning, the bank successfully restored its NOP to positive levels during the course of last year and again more recently, ensuring full alignment with all regulatory requirements. The bank also highlighted that throughout this corrective period, it continued its business operations without interruption, with total US dollar sales exceeding USD 600 million, serving the needs of individuals, businesses, and corporates for transactions including telegraphic transfers and card payments.

The bank further emphasised that US dollar liquidity continues to be actively and prudently managed through diversified funding sources, robust treasury operations, and close coordination with key stakeholders, ensuring its ongoing ability to meet customer and market needs without disruption. Of particular note, BML continued to extend new loans to the tourism sector, with USD 365 million disbursed from 2024 to the current period, bringing the net tourism sector loan portfolio to USD 585 million as at the end of Q1 2026.

The bank's strong overall financial standing was also reaffirmed, with reference to the address delivered by CEO and Managing Director Mohamed Shareef at the Annual General Meeting held on 28 March 2026, in which he highlighted that the bank has achieved record results in its 43-year history, supported by solid capital and liquidity ratios that remain well within the risk appetite set by the Board, as well as regulatory and international standards.

Bank of Maldives concluded its statement by reaffirming its steadfast commitment to transparency, prudent financial management, and maintaining the confidence of its customers, shareholders, and all stakeholders.