BML says it has a positive NOP, strong liquidity

The Bank of Maldives (BML) states that it has a positive Net Open Position (NOP) in US dollars, and is also in a strong liquidity position.

The national bank issued a statement on Thursday clarifying its NOP in US dollars, the management of US dollar liquidity, and the distinction between these two important financial concepts.

The BML explained that the NOP represents the difference between a bank’s foreign currency assets and liabilities at a given point in time. It is a measure of exposure to exchange rate movements rather than an indicator of immediate cash availability. In contrast, liquidity 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, they serve different purposes in assessing the bank’s financial health and risk profile.

BML acknowledged that its NOP had deteriorated from December 2020, reaching a sort position of 20 percent in September 2024, meaning that the Bank oversold approximately USD 200 million as of that date.

BML said that it had been at risk of incurring foreign exchange losses for the amount if the MVR currency had devalued.

But the bank stressed that this does not relate to its liquidity position or its ability to meet customer withdrawals and payment commitments.

BML said that the NOP short position was actively addressed through coordinated measures, with the bank successfully restoring its NOP to positive levels during the course of last year.

“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 regulatory requirements,” stated the bank.

BML said that in addition to correction of the NOP short position, the bank continued its business operations with total US dollar sales exceeding USD 600 million, which was used for individual, businesses and corporates requirements including TT payments and cards.

The bank said that US dollar liquidity continues to be actively and prudently managed through diversified funding sources, robust treasury operations, and close coordination with key stakeholders.

“These measures ensure the bank’s ongoing ability to meet customer and market needs without disruption,” stated BML. “In particular, it is important to note that the bank continued providing new loans to the largest segment, the tourism sector, amounting to USD 365 million from 2024 to current period and the net tourism sector loan portfolio as at end of Q1 2026 reached USD 585 million.”

Speaking at the BML’s Annual General Meeting last Saturday, CEO and Managing Director Mohamed Shareef stated that the bank’s financial performance remains strong.

The bank has achieved record results last year, supported by solid capital and liquidity ratios that are well within the risk appetite set by the board, regulatory requirements, and international standards.

The BML stated that it remains committed to transparency, prudent financial management, and maintaining the confidence of its customers, shareholders, and stakeholders.