Vice President Ahmed Adeeb Abdul Ghafoor has announced that the minimum reserve rates for banks at Maldives Monetary Authority (MMA) is now at 10 percent.
He made the statement speaking in the ceremony held to launch the MVR 30 million loan scheme for small and mid-sized businesses on Sunday night. The loan scheme is run with the assistance of Islamic Development Bank and Bank of Maldives.
Vice President Adeeb stated that when the minimum reserve rates are reduced, that will motivate more banks to invest in the country. The reserve rates were previously held at 25 percent.
Vice President Adeeb said that under the previous rates, a significant sum of money was held without being allowed to circulate in the market. He added that when the rates are lowered, there is more cash circulation and therefore this benefits the businesses and investors.
He attributed the lack of foreign banks in the Maldives to the high reserve rates. Vice President Adeeb said that foreign banks were vital to the development of the nation. He added that with this change, it was anticipated that the local economy will develop in leaps.
Lowering minimum reserve will attract more banks: Vice President
