Maldives in Talks with India for Rufiyaa-Based Trade, Eyes Local Currency Payments for Imports

The Maldives is exploring new trade agreements with India and China that would allow the island nation to pay for imports in its local currency, the Maldivian Rufiyaa, rather than US dollars. This move signals a potential shift away from the dollar's dominance in global trade.

Discussions are underway with India to establish this payment system, and a similar arrangement is sought with China, stated Minister for Economic Development Mohamed Saeed. Annually, the Maldives imports approximately $780 million in goods from India and $720 million from China.

Saeed, speaking at a political event, linked the success of these trade deals to his party securing a majority in upcoming parliamentary elections. He asserted that this could strengthen the Maldivian Rufiyaa against the dollar and help stabilize currency exchange rates.

The minister explained that this approach conserves foreign exchange reserves for both the Maldives and its trading partners. In 2023, India authorized the Maldives to open Special Rupee Vostro Accounts to facilitate trade in local currencies.

Saeed emphasized that the Maldives values open trade relationships with diverse nations. Additionally, he revealed that the Maldives has invited the Governor of the Central Bank of China to discuss a potential currency swap agreement, which would allow imports from China to be paid in either Chinese Yuan or Maldivian Rufiyaa.

The Maldives' pursuit of these trade deals illustrates a growing trend toward using local currencies in international transactions. These efforts could reduce reliance on the US dollar and potentially lead to greater stability for the Maldivian economy.

 

[Satya Dev]

Indian baniyas have no self respect.

 

[Shafted mohammed]

Their currency would go in free fall and ask them to pay in dollars . Yuan they are getting free as China prints currency notes multiple times with same numbers. Pay in dollars before the goods are delivered. Their 4.5 billion $ economy would be reduced now to 2.5 billion $.

 

[Banjo Strings]

No! No local currency payments. US dollars will be acceptable.

 

[charminar_waale_ismail_bhai]

Deal looks fine as long as this is not an avenue for Maldivians to start pushing in Chinese Yuan in lieu of Maldivian Rufiyaa.

If we can negotiate to have all transactions completed in Indian Rupees alone, this will be even better deal as Indian Rupee commands higher acceptability than Maldivian rufiyaa.

 

[charminar_waale_ismail_bhai]

Indian baniyas have no self respect.

You have a problem with Indian Baniyas?

If anything, this country needs more Baniyaas than Gandhis and Bhodroloks.

 

[kumar]

No Maldivian currency. If they want imports, then in dollars or rupees.

 

[Sudha]

Dont do any trade or give any aid to Maldives. Whatever Bharat does, they will allow the chinese to operate military bases near Bharat. Just ignore the is.c radical nation & see it fall like a pack of cards. Ousting the present is.c radical regime is the only soultion & without economic hardship that will not happen & it will knock into the heads of ordinary citizens of maldives the importance of good relations with Bharat.

 

[kumar]

They extract all concessions from India but take Anti India stance.

 

[Satya Dev]

You have a problem with Indian Baniyas?

If anything, this country needs more Baniyaas than Gandhis and Bhodroloks.

So you must've liked the shameless display of stinking wealth at Jamnagar!

 

[charminar_waale_ismail_bhai]

So you must've liked the shameless display of stinking wealth at Jamnagar!

Their money, their function, their display. Who am I to judge.

Are you jealous of their wealth?

 

[BnglrTester]

India should put the interest of its own starving millions above a country trying to rip it off. We should trade in dollars and increase foreign exchange. Maldives can't sell anything to us. Why bother about their useless currency? We need not fall for thee games where countries try to pitch us against China.

 

[KK Nag]

India should put the interest of its own starving millions above a country trying to rip it off. We should trade in dollars and increase foreign exchange. Maldives can't sell anything to us. Why bother about their useless currency? We need not fall for thee games where countries try to pitch us against China.

Also, their currency is stronger against India, at 5.41 INR against 1 MVR. When they are beggars and do not have anything to sell other than tourism, their currency should have lower value. Let them use INR as their national currency, and then we can think about business.