The Ministry of Economic Development and Trade of the Maldives has recently announced the signing of a Memorandum of Understanding (MoU) with the People's Bank of China (PBOC). This agreement is designed to establish a framework for current account transactions and direct investments using their respective currencies.

The main intention behind this MoU is to facilitate smoother and more efficient trade and investment relations between the Maldives and China. By promoting the settlement of transactions in local currencies, the agreement aims to enhance convenience for traders and stimulate cross-border investments between the two nations.

This significant step follows President Dr. Mohamed Muizzu’s state visit to China in January 2024, during which he met with President Xi Jinping. The discussions centered on strengthening the comprehensive strategic partnership between the Maldives and China, showcasing a mutual commitment to deepening economic cooperation.

China is one of the Maldives' largest trade partners, with bilateral trade exceeding USD 700 million. Additionally, it is the top source of tourists visiting the Maldives, indicating that both nations stand to gain significantly from this agreement. The MoU is aligned with President Dr. Muizzu’s vision of enhancing economic openness and fortifying trade relations with key international partners.

The signing of this MoU marks a major milestone in bolstering economic ties and fostering increased trade and investment flows between the Maldives and China.