Sri Lanka to extend $200 mn line of credit to Maldives

Sri Lankans would spend more on Maldivian products under the agreement.

Colombo: Sri Lanka has offered to extend a USD 200 million line of credit to the Maldives, Maldivian President Mohamed Nasheed has said.

Nasheed told reporters that he hoped to finalise the arrangement with the government of Sri Lanka when he attends President Mahinda Rajapakse`s swearing-in ceremony on Friday in Colombo, Minivanan News reported from Male.

"Preliminary discussions for the credit line have been ongoing for some time. An agreement would be signed in the near future between the Maldives Monetary Authority (MMA) and the Sri Lankan Central Bank," President Nasheed said.

According to Minivanan News, the Maldives government`s objective was to enable Maldivians to purchase Sri Lankan rupees with the domestic Maldivian rufiyaa currency for imports, while making the Maldivian rufiyaa available to Sri Lankans who wished to buy Maldivian goods.

"The mechanism would improve the country`s balance of payments, broaden business opportunities and alleviate the high demand for US dollars in the country," President Nasheed said.

While Sri Lankans would spend more on Maldivian products under the agreement, local demand for US dollars would "decline significantly" when Maldivians are able to spend "their own currency in Sri Lanka", Minivanan News reported.

PTI

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