Gov’t to Explore Chinese Trade in Rufiyaa, Aims to Reduce Dollar Reliance

Minister of Economic Development and Trade, Mohamed Saeed, disclosed that China is poised to enable payments for goods in Maldivian Rufiyaa (MVR).

Minister Saeed highlighted the state of the country’s economy upon President Dr Mohamed Muizzu’s assumption of office, detailing ongoing efforts to address economic challenges and achieve tangible results.

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Addressing President Muizzu’s policy aimed at bolstering the rufiyaa by devaluing the dollar, Saeed noted the president’s prerogative to print money between November 17 and December 31. However, Minister Saeed clarified that despite this authority, the Economic Council was directed to refrain from additional money printing.

Highlighting the implications of the president’s economic policy, Saeed expressed optimism about increased accessibility to dollars in the domestic market, albeit at a reduced rate. He noted a potential decrease in the value of the dollar by at least MVR 0.20 under the new policy.

As part of efforts to devalue the dollar, Minister Saeed mentioned a currency swap proposition with the Bank of China, initiated during the president’s visit to China. He clarified that the currency swap was intended to facilitate trade between China and Maldives rather than bolstering Maldives reserve position.

With China currently importing goods worth USD 700 million to Maldives, Minister Saeed highlighted the significance of the currency swap, enabling Maldives to settle import payments in MVR. This move, he anticipated, would lead to a reduction in demand for the dollar.

Explaining the mechanism, Saeed elaborated that once the arrangement is established, Maldivian importers could transact with Chinese suppliers in MVR, consequently diminishing the demand for dollars in the market.

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