Chinese Ambassador to the Maldives Kong Xinhua states the introduction of Chinese Yuan accounts by Bank of Maldives (BML) serves as a crucial step towards implementing China-Maldives Free Trade Agreement (FTA).
In a first, BML introduced Chinese Yuan accounts in the Maldives on Monday,
Speaking at the launch event, Ambassador Kong highlighted that the ‘Memorandum of Understanding on a Framework for Cooperation to Promote the Settlement of Current Account Transactions and Direct Investment in Local Currencies’, signed by China and the Maldives in September 2024, laid the groundwork for increasing the use of local currencies and enhancing bilateral trade and investment.
He also noted that the FTA, which came into effect in January, offers a strong institutional framework to support trade and investment between the two nations.
Ambassador Kong stressed that the introduction of Chinese Yuan accounts by BML represents a significant step in putting into action the agreements made by the leaders of both countries and furthering the implementation of the FTA.
“Promoting local currency settlement will strongly boost bilateral economic and trade development. By settling directly in local currencies, we can effectively reduce exchange rate fluctuation risks, cut costs in foreign exchange intermediaries, and improve capital efficiency,” he explained.
Ambassador Kong further stated that settling transactions in local currencies not only offers businesses a more convenient and secure environment for cross-border payments, but also strengthens the independence and resilience of both countries' financial systems.
He emphasized that the introduction of local currency settlement and the launch of Chinese Yuan accounts will play a key role in advancing the Free Trade Agreement (FTA). According to him, these steps will help unlock greater trade potential, increase investment volumes, and expand areas of cooperation as the implementation of the FTA progresses.