Maldives: Financial System Stability Assessment; and Press Release

IMF Staff Country Reports, December 14, 2023

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Maldives: Financial System Stability Assessment; and Press Release

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Bibliographic details

• Published: December 14, 2023
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9798400262708.002

Overview and key findings

• Presents a financial system stability assessment (FSSA) report for Maldives.
• Maldives is described as a tourism dependent economy with a small financial sector dominated by state-owned banks.
• Systemic risks identified:
  • A growing sovereign-bank nexus.
  • High dollarization.
  • A shortage of foreign exchange.
• The Financial Sector Assessment Program (FSAP) concluded that further strengthening of financial sector policies is needed to improve the resilience of the financial system.

Policy recommendations and priority actions

• Address frictions in the foreign exchange market through regulatory measures.
• Resume liquidity management operations.
• Develop systemic risk indicators.
• Establish a macroprudential framework and associated instruments.
• Publish a financial stability report.
• Ensure full reporting of non-bank payment obligations.

Financial safety net, crisis management, and liquidity

• Enhance financial safety net and crisis management arrangements by:
  • Improving early intervention mechanisms.
  • Introducing recovery and resolution planning.
  • Enhancing the deposit insurance system.
• Establish an effective liquidity assistance framework.

Subject tags and keywords (as provided)

• Financial regulation and supervision
• Financial Sector Assessment Program
• Financial sector policy and analysis
• Financial sector stability
• Foreign exchange
• International organization
• Monetary policy
• Stress testing
• Keywords: Asia and Pacific, bank capitalization, Financial Sector Assessment Program, Financial sector stability, FSAP finding, Global, IMF FSAP stress test result, MMA central government debt holding, risk analysis, Stress testing, World Bank FSAP mission

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