India Extends ₹3,000 Crore Currency Swap Facility to Maldives, Strengthening Financial Cooperation

India has approved the Maldives government’s request to roll over a ₹3,000 crore (₹30 billion) currency swap facility, reaffirming its commitment to supporting the island nation’s financial stability and strengthening bilateral economic cooperation.

The decision, announced on October 16, 2026, forms part of India’s Neighbourhood First Policy and MAHASAGAR vision, which place particular emphasis on building stronger economic, developmental and strategic relationships with countries across the Indian Ocean region.

The extension will allow the Maldives to continue accessing Indian rupee liquidity under the existing bilateral currency swap arrangement, supporting the country’s financial requirements and economic stability.

₹3,000 Crore Currency Swap Extended Under SAARC Framework

The currency swap facility operates under the Framework on Currency Swap Arrangement for SAARC Countries, administered by the Reserve Bank of India (RBI).

The bilateral arrangement between the RBI and the Maldives Monetary Authority (MMA) was signed during Maldivian President Dr Mohamed Muizzu’s state visit to India in October 2024.

Under the agreement, the Maldives received its first drawdown of ₹3,000 crore on April 23, 2026. India’s latest decision permits the rollover of this facility following a request from the Maldivian government.

The arrangement falls within the SAARC Currency Swap Framework for 2024–2027, which provides eligible countries access to financial support under agreed terms.

The framework includes concessional provisions, including favourable interest rates and other financing conditions, designed to improve the accessibility of currency swap assistance.

How the Currency Swap Facility Supports Maldives

A currency swap arrangement allows participating central banks to exchange currencies under predetermined conditions, providing access to liquidity when required.

For the Maldives, the Indian rupee facility offers an additional source of financial liquidity that can support domestic financial stability and help manage short-term funding requirements.

Such arrangements are particularly relevant to smaller economies that depend heavily on international trade, tourism and external financial flows.

The Maldives relies substantially on tourism-related foreign exchange earnings and imports a wide range of essential commodities. Consequently, access to reliable financial support mechanisms plays an important role in maintaining economic resilience.

India’s decision to extend the facility provides continuity in financial cooperation while reinforcing the institutional relationship between the RBI and the Maldives Monetary Authority.

RBI Has Provided Over $1.1 Billion in Currency Swap Support

India has maintained a longstanding financial assistance relationship with the Maldives through currency swap arrangements and other financing mechanisms.

Since the introduction of the SAARC Currency Swap Framework in 2012, the Reserve Bank of India has provided aggregate currency swap support exceeding $1.1 billion to the Maldives.

During President Muizzu’s visit to India in October 2024, the two countries concluded currency swap arrangements covering $400 million and ₹3,000 crore.

The $400 million facility helped the Maldives address its financial requirements during a period of economic pressure.

In April 2026, the Maldives settled the $400 million swap facility while welcoming India’s approval of the first ₹3,000 crore withdrawal under the Indian rupee swap window.

The latest rollover continues this financial cooperation and demonstrates India’s sustained support for its Indian Ocean neighbour.

India Also Supports Maldives Through Treasury Bonds and Bills

Beyond currency swap arrangements, India has extended substantial financial assistance to the Maldives through investments in government securities.

India subscribed to two long-term Maldivian treasury bonds valued at $250 million and $100 million, providing a combined $350 million in financial support.

These investments represent another component of India’s assistance to the Maldivian economy.

India also supported the Maldives through three treasury bills with a combined value of $150 million, subscribed through the State Bank of India.

The Maldives subsequently settled these treasury bills, while the Indian government covered approximately $42.8 million in interest payments associated with the securities, according to the latest official account.

The treasury bill arrangements helped the Maldives manage its financing requirements over several years.

Together, the currency swap facilities, treasury bonds and treasury bill assistance demonstrate the substantial financial cooperation established between the two countries.

Maldives Remains a Priority Under India’s Neighbourhood First Policy

India considers the Maldives an important partner under its Neighbourhood First Policy, which prioritises closer relations with neighbouring countries through economic cooperation, infrastructure development and institutional engagement.

The Maldives occupies a strategically significant location in the Indian Ocean, close to major international maritime routes connecting Asia, Africa and the Middle East.

The geographical proximity between India and the Maldives also creates opportunities for cooperation in trade, tourism, maritime security, connectivity and economic development.

India’s financial assistance reflects the broader bilateral relationship, which includes infrastructure projects, development financing, capacity building and security cooperation.

The continuation of the ₹3,000 crore swap facility strengthens the economic dimension of this partnership while supporting the Maldives’ efforts to maintain financial stability.

MAHASAGAR Vision Expands Indian Ocean Cooperation

The decision also aligns with India’s MAHASAGAR vision — Mutual and Holistic Advancement for Security and Growth Across Regions.

The vision promotes regional cooperation, sustainable development, economic resilience and collective security among countries connected by the Indian Ocean.

Within this framework, India seeks to deepen partnerships through development assistance, economic engagement, connectivity and maritime cooperation.

Financial support to neighbouring countries complements these objectives by helping strengthen regional economic stability and creating opportunities for long-term cooperation.

The Maldives remains a significant partner in India’s Indian Ocean engagement, with both countries maintaining close relationships across economic and maritime sectors.

India-Maldives Comprehensive Economic and Maritime Security Partnership

India and the Maldives adopted a Joint Vision for a Comprehensive Economic and Maritime Security Partnership during President Muizzu’s visit to India in October 2024.

The agreement established a broader framework for expanding cooperation across economic development, infrastructure, maritime security and regional connectivity.

The partnership encompasses several important areas, including transport infrastructure, housing, water supply, sanitation, healthcare, port development and maritime cooperation.

Both countries have also emphasised the importance of improving connectivity, strengthening trade relations and supporting development initiatives that directly benefit the Maldivian population.

India’s continued financial assistance complements these efforts by reinforcing economic stability alongside ongoing development projects.

The ₹3,000 crore currency swap rollover represents another step in implementing the broader objectives of the bilateral strategic partnership.

India and Maldives Deepen Economic Partnership

India’s approval of the ₹3,000 crore currency swap rollover reinforces its longstanding role as a development and financial partner of the Maldives.

The extension builds on more than a decade of monetary cooperation under the SAARC framework, alongside India’s support through government securities and development financing.

By maintaining access to rupee liquidity, the arrangement helps strengthen the Maldives’ financial resilience while supporting closer economic engagement between the two countries.

The latest decision further consolidates India-Maldives relations under the Neighbourhood First Policy and MAHASAGAR vision, strengthening a partnership centred on economic stability, development cooperation and shared prosperity in the Indian Ocean region.

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References

1. DD India, October 16, 2026 — India Agrees to Maldives Request for Rollover of Rs 30 Billion Swap Facility.
2. Ministry of Foreign Affairs, Republic of Maldives, April 23, 2026 — Maldives Settles USD 400 Million Bilateral Swap Facility and Welcomes India’s INR 30 Billion Currency Swap.
3. Prime Minister’s Office, Government of India, October 2024 — PM’s Joint Press Statement with President of Maldives H.E. Mohamed Muizzu.
4. President’s Office, Republic of Maldives, October 2024 — India and Maldives: A Vision for Comprehensive Economic and Maritime Security Partnership.
5. Akashvani News, April 24, 2026 — India Approves ₹30 Billion First Withdrawal for Maldives Under SAARC Currency Swap Framework.

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