Development bank to open new avenues for dollars, Saeed says
Saeed highlighted the bank’s role in raising funds for various industries included in the government's economic development plan.
Economic minister Mohamed Saeed announced on Wednesday that the establishment of the Maldives' first-ever development bank will increase the availability of dollars within the country's financial system.
Saeed addressed questions regarding the need for the development bank and outlined how the bank will impact the supply of dollars.
Saeed clarified that the dollar shortage in the Maldives is not due to economic issues but rather the design of the country's financial system. He emphasised that the development bank is expected to attract foreign direct investment, thus increasing the availability of dollars throughout the financial system.
"Investment in financially viable projects will contribute to economic growth," Saeed said. "This will lead to an increase in the development bank's foreign exchange reserves and a significant change in the government's reserves."
Saeed outlined several key reasons for the importance of the development bank:
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Preserving natural resources for future generations
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Reducing regional and individual prosperity gaps
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Supporting the development of long-standing underdeveloped islands and areas
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Maintaining tourism-related infrastructure
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Managing repairs to state-funded infrastructure
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Providing quality housing and modern living conditions
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Supporting elderly care with dignity and respect
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Repaying state debt and easing the debt burden for future generations
According to Saeed, the services currently offered within the Maldives' financial system are limited compared to the needs of its economy.
"Commercial banks mainly focus on short- and medium-term debt, which has constrained the economy’s growth potential," Saeed explained in the written statement.
He further noted that the development bank would provide financial and technical assistance beyond traditional debt. This support includes equity finance, funds, syndication, and risk insurance.
The development bank will focus on five key areas:
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Energy and food security and price stability
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Housing
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Environmental protection
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Tourism and air transport services
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Marine resources and related economic activities
Saeed highlighted the bank’s role in raising funds for various industries included in the government's economic development plan.
The development bank was established in May under the authority of the president. It applied for a license from the Maldives Monetary Authority (MMA) in July and appointed board members in August.
The MMA issued the operational license to the bank on Sunday.
