Maldives seeks US$ 200 m credit line from Lanka

The Maldivian Government hopes to finalize an agreement with Sri Lanka to establish a credit line worth US$200 million, President Mohamed Nasheed told the press yesterday prior to departing for Sri Lanka to attend the swearing-in ceremony of President Mahinda Rajapaksa.

As preliminary discussions for the credit line have been ongoing for sometime, the Maldivian President said he hoped an agreement would be signed in the near future between the Maldives Monetary Authority (MMA) and the Sri Lankan Central Bank.

"Our aim is not really to use that money for anything," he explained.

"Our aim is to set up a mechanism for Sri Lankan currency to be available for purchase in the Maldives and for Maldivian currency to be available for purchase in Sri Lanka. To set up that mechanism, first of all a framework agreement has to be established."

He added that the Maldivian government's objective was to enable the Maldivians to purchase Sri Lankan Rupees with Maldivian Rufiyaa for imports as well as making Maldivian Rufiyaa available to Sri Lankans who wish to buy Maldivian goods.

The mechanism would improve the Maldives balance of payments, broaden business opportunities and alleviate the high demand for US dollars in the country, he said.

While Sri Lankans would spend more on Maldivian products as a result of the agreement, local demand for US dollars would "decline significantly" when Maldivians are able to spend "their own currency in Sri Lanka." minivannews