In his weekly radio address today, President Mohamed Nasheed has said that the issuance of US Dollar Treasury bonds would ease the dollar shortage. He said it would also increase the exchange of US dollar from the government to individuals and private banks.
In his radio address which was broadcast on Voice of Maldives today at 10am, the President said he believed that the issuance of the US Dollar Treasury bonds would befit our economy in several ways.
He noted that in the past, when the government needed money, the government has to resort to taking loans from the Maldives Monetary Authority (MMA). He added that every time the government borrowed money from MMA, money supply increased and therefore caused depreciation in the exchange rate.
The President stated that the most notable benefit of purchasing US Dollar treasury bonds from the government was that the money will be kept at the government reserve for the due duration.
He further noted that as inflation rate was also linked to money supply, by selling bonds, the government would be able to control inflation.
In his radio address, the President also spoke on the budget for 2010 proposed to the People’s Majlis.
He said the most important aim of this budget was to reduce the cost of commodities and services. He added that the government’s aim was to increase people’s disposable income.
“Real development comes when people’s disposable income increases; when consumption increases. Consumption can be increased when inflation is controlled. To control inflation, we need to reduce government expenditure”, said the President.