China-Maldives FTA to Boost Bilateral Trade to USD 1 Billion: Government
The Free Trade Agreement (FTA) between China and Maldives, once implemented, is expected to significantly increase bilateral trade, potentially reaching USD 1 billion, according to Heena Waleed, Spokesperson for the President's Office.
Speaking at a press conference held at the President’s Office last evening, Heena emphasized the substantial benefits that the newly signed Memorandum of Understanding (MoU) between the Maldivian government and the People’s Bank of China would bring to both nations. The MoU was signed on September 13 and aims to simplify transactions and bolster economic ties between the two countries.
"Currently, Maldives and China conduct around USD 700 million worth of trade. However, with the FTA coming into effect, we anticipate this figure to increase to USD 1 billion," said Heena.
The agreement will allow businesses and individuals to conduct transactions in their local currencies—Chinese yuan and Maldivian rufiyaa—thereby reducing the reliance on US dollars for payments. Heena noted that this currency flexibility will especially benefit Maldivian businesses and citizens traveling to China, easing transactions and lowering dollar dependency.
"With this agreement, Maldivians will have the opportunity to make payments directly in rufiyaa, reducing the demand for US dollars when conducting trade or making purchases from China," she added.
According to a statement from the Ministry of Economic Development, the FTA will establish a framework for facilitating current account transactions and direct investments between the two countries, streamlining economic activities in their respective currencies.
The FTA was initially signed on December 18, 2014, during former President Abdulla Yameen’s visit to China. It was later approved by the coalition majority of the Progressive Party of Maldives (PPM) and Maldives Development Alliance (MDA) on November 29, 2017. However, the agreement was not implemented due to the subsequent change in government.
President Dr. Mohamed Muizzu announced in July that the FTA will come into effect by the end of September. When asked for an update during the press conference, Heena confirmed that the process is progressing smoothly, signaling a positive step toward stronger economic cooperation with China.