The government’s decision to issue treasury bonds in US dollars will ease the dollar shortage, Maldivian President Mohamed Nasheed told radio station Voice of Maldives.
The move would increase the exhange of US dollars between governments, individuals and private banks, he said. Previously the government has borrowed money from the Maldives Monetary Authority, a short-term measure that depreciates the exchange rate.
The new measures would allow the government to control inflation, he said, by linking the supply of money to the sale of government bonds. The ultimate aim was to boost the economy by increasing people’s disposable income.
“Real development comes when people’s disposable income increases, when consumption increases. Consumption can be increased when inflation is controlled, and to control inflation we need to reduce government expenditure,” Nasheed said.
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