The Maldives and China have signed a memorandum of understanding (MoU) to exchange bilateral currencies, a move aimed at facilitating trade and investment between the two nations, the Maldivian Ministry of Economic Development said on Friday.
The agreement, which both countries have been working on for several months, is expected to enhance trade opportunities by allowing transactions in the Maldivian Rufiyaa and the Chinese Yuan.
“This MoU will establish a framework to facilitate current account transactions and direct investments between the two countries in their respective currencies, further strengthening trade and investment ties between the Maldives and China,” the ministry said in a statement.
The deal will also enable easier importation of goods from China, the ministry added, while cross-border investments between the nations are expected to increase significantly.
China remains one of the Maldives’ largest trading partners, with bilateral trade reaching $700 million annually. Chinese exports account for a significant portion of the Maldives’ imports, making the currency exchange agreement a key development in further deepening economic relations.
Analysts view the agreement as a significant boost to the Maldives’ economy, noting that the country has become increasingly dependent on foreign trade and investments. They highlight key sectors such as construction, tourism, and infrastructure development, which are expected to benefit most from the deal. These sectors, analysts suggest, are crucial drivers of economic growth, and the agreement is likely to attract further international interest, solidifying the Maldives’ position as a regional hub for foreign investment.