In a significant move, Male, Maldives, signed a pivotal Memorandum of Understanding (MoU) with the People’s Bank of China, enhancing economic cooperation. The agreement aims to facilitate smoother transactions and investments in local currencies. Potential collaboration includes hosting a branch of China's largest bank. This development strengthens ties following President Muizzu's successful visit to China. Furthermore, the Maldives is exploring a Free Trade Agreement with China. Earlier, the Maldives partnered with India to introduce the Unified Payments Interface, signaling a positive shift in diplomatic relations.
In a significant stride towards advancing economic ties and fostering international partnerships, Male of the Maldives sealed a momentous Memorandum of Understanding (MoU) with the People’s Bank of China (PBOC) this Saturday. This agreement is poised to pave the way for smoother current account transactions and direct investments between the two nations, utilizing their respective currencies.
Excitingly, there are talks of the Maldives potentially becoming home to a branch of China's largest bank, the Industrial and Commercial Bank of China (ICBC), as reported by the state-run PSM News. With China already being a vital trade ally of the Maldives, boasting bilateral trade figures exceeding USD 700 million, and being a significant source of tourists, this new agreement is set to further fortify their economic collaboration.
The MoU, inked between the Maldivian Ministry of Economic Development and Trade and the People’s Bank of China, aims to foster trade and investment relationships by promoting transactions in local currencies, thus streamlining economic activities between the two nations.
This development builds upon the successful state visit of President Mohamed Muizzu to China earlier this year, where he engaged in constructive discussions with President Xi Jinping on fortifying their comprehensive strategic partnership and boosting economic cooperation.
The signing of this MoU signifies a substantial leap towards enhancing economic bonds and amplifying trade and investment prospects between the Maldives and China. Additionally, Male is currently in discussions with Beijing for a Free Trade Agreement, with preparations nearing completion, awaiting mutual agreement for activation.
Furthermore, echoing a commitment to technological advancements and financial cooperation, the Maldives previously partnered with India to introduce the Unified Payments Interface (UPI) in the archipelago nation. The UPI, a cutting-edge real-time payment system developed by the National Payments Corporation of India (NPCI), is designed to streamline inter-bank transactions via mobile phones.
Interestingly, these developments precede President Muizzu's imminent visit to India, where efforts are underway to establish a similar Rupee-Rufiyaa arrangement. Despite earlier strains in relations following Muizzu's pro-China stance upon assuming office, recent diplomatic engagements, including a crucial visit by External Affairs Minister Jaishankar, have signaled a positive shift. The Maldivian foreign ministry acknowledged Jaishankar's visit as a "significant milestone," expressing keenness to reinforce the bilateral ties with India.
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