Maldives President Nasheed confident of stable economy, lower cost of living

President Mohamed Nasheed President Mohamed Nasheed has expressed confidence of a stable exchange rate and a subsequent fall in the cost of living sooner than expected.

On April 10, the government implemented a managed float of the rufiyaa, allowing it to be traded against the US dollar within 20 percent band of the peg rate of Rf.12.85.

The next day the Bank of Maldives traded a dollar at Rf15.42, the highest in the band and the move prompted an overnight price hike in the import-dependent Maldives’ economy.

However, President Nasheed in his week-end radio address expressed “optimism of an early stabilizing the exchange rate below the median of the band of fluctuation allowed for the exchange rate of Rufiyaa against US Dollar,” the President’s office said.

The government was confident of an expeditious fall in the prices of goods and services as the exchange rate stabilized, he said.

According to Nasheed the government, from the time it took office, has continued to implement measures to maintain the value of Rufiyaa.

With technical assistance from friendly countries and international financial institutions, the government has taken measure to reduce expenditure and increase revenue.

He said a floating exchange rate was a “”necessary step to ensure the long term stability and prosperity of the Maldives.

 “Changing the exchange rate mechanism, maintaining the value of Rufiyaa is linked to finding a permanent solution for the constraints on our economic development,” he said.

Nasheed said the new exchange rate was important to “finance budget deficit, increase productivity, and increase export of goods and services” and pledged to pass on its benefits to the people.

He further noted that economic policies that enable commercial transferability of land, promote public private partnerships, and reduce public expenditure and government business were also necessary to enhance economic growth of this country.

The President thanked the people and businessmen for their “patience and faith in the government” following its decision to float the exchange rate.

Nasheed has promised to bring down the exchange rate to Rf.10 as against the dollar, amongst his many electoral pledges. (Asian Tribune)

Govt. to downsize public, civilservants; Cabinet finalises incentives for voluntary leavers

The Maldives Cabinet on Wednesday decided to offer incentives and financial support for government and civil servants leaving their jobs voluntarily.

The move comes as part of government efforts to downsize public and civil servants and thereby cut down on government expenditure – a recommendation often reiterated by the International Monetary Fund.

The President’s office said employees can opt for one of four retirement incentive options finalised by the Cabinet.

Employees who opt to retire under this programme will not be employed in any company with state or government share. Ministry of Finance and Treasury will announce the procedures, as decided by the Cabinet, for government employees to apply to retire under the programme tomorrow.

The deadline for applying for retirement is May 31 2011.