MVR 30 Billion Indian Rupee Swap Converted to Dollars

The Maldivian government has converted Indian rupees worth approximately $319 million received under a currency swap agreement with India, into US dollars through a third party.

According to sources who spoke on condition of anonymity, the conversion was facilitated via a private US-based intermediary.

To secure the required US dollars, the Maldives Monetary Authority (MMA) had approached multiple parties. The MMA also sought legal advice to ensure the transaction could proceed within the framework of the existing agreement with India.

However, under India’s Foreign Exchange Management Act (FEMA), currency swap funds provided by India can only be exchanged under specific conditions.

The currency swap arrangement was extended by India to help the Maldives meet an outstanding payment obligation of $400 million, which the country had been unable to settle. The $319 million equivalent in Indian rupees was provided as a means to ease that repayment pressure.