Millennium Post (Kolkata)

Maldives in discussion with India to pay in local currency for imports, says minister


MALE: The Maldives is cur- rently discussing with India if the island nation can make payments for its imports from the country in Maldivian Rufiyaa, a senior minister has said.

A similar arrangemen­t is also being worked out for imports of goods from China, Minister for Economic Developmen­t Mohamed Saeed said and noted that annually, Maldives imports goods worth $780 million and $720 million from India and China respective­ly.

According to the news portal, Saeed was speaking at an event held on the island of Maavah during President Mohamed Muizzu’s visit to Laamu Atoll ahead of parliament­ary elections on April 21.

The minister stated that if the ruling party were able to secure a majority in Parliament, they would be able to bring “the dollar rate back down to official market values within approximat­ely two years.”

Saeed said his party was now getting all signals that “there was a possibilit­y to make non-dollar payments for all of these massive import arrangemen­ts.”

Internatio­nal trade between two countries in local currency is a mutually beneficial mechanism as it helps in saving each other’s foreign exchange reserves.

Moreover, the move will mark a significan­t shift away from the dominant use of the US dollar in internatio­nal transactio­ns.

In July 2023, Government of India had declared that Maldives was among the 22 countries that had been permitted by the Reserve Bank to open Special Rupee Vostro Accounts (SRVAs) as part of efforts to promote bilateral trade in local currencies.

The aim was to ensure that goods imported from India could be paid for in Maldivian Rufiyaa, Saeed said, and added, “Maldives was not a country to break ties with any other nation, and that we are a country that is open to trade.”

“Even if we get just the parliament­ary majority, the Maldivian Rufiyaa will strengthen by 30 or 40 per cent against the dollar. What is the result? The dollar rate will fall below MVR 15.42 in the future,” Saeed added.

The minister also revealed that Maldives had invited the Governor of the Central Bank of China to visit Maldives and that efforts are underway to sign a currency swap agreement between the two countries.

“Under the agreement, even if trade facilitati­on will receive only half of the $720 million, Chinese imports can be paid for in Yuan or Maldivian Rufiyaa,” Saeed was quoted as saying.

‘Annually, Maldives imports goods worth $780 million and $720 million from India and China respective­ly’

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