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ECB rate hikes might knock 3.8 pct off euro area economy: analysis

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Given that governments in eurozone have or will opt out of the supportive measures which were put into place in the face of the surging energy prices over a year ago, the regional economy can contract up to 5 percent in 2024, a Bloomberg analysis noted.

FRANKFURT, Aug. 7 (Xinhua) — Aggressive rate hikes by the European Central Bank (ECB) can inflict an adverse impact on the economy of the euro area, and will trim 3.8 percent off from its economic output in 2024, a Bloomberg analysis published on Monday said.

The analysis said that the combination of high interest rates and limited government capacity to stimulate development poses a potential constraint on the economic growth of the euro area.

Given that governments in the euro area have or will opt out of the supportive measures which were put into place in the face of the surging energy prices over a year ago, the euro area economy can contract up to 5 percent in 2024, the analysis noted.

The ECB has lifted key interest rates by a total of 425 basis points since last July in a bid to bring down inflation, which is hovering well above its target of 2 percent.

The central bank has refrained from pre-announcing another hike for its next rate-setting meeting, insisting that interest rates will remain its primary tool in the fight against inflation.

The ECB considered the euro area economy to be weak in the short run but said it would pick up momentum in the long run. The central bank will publish its latest edition of projections for inflation as well as economic growth in the euro area in September.

Source(s): Xinhua

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BML issues MVR 5 bil in loans in 2023

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Bank of Maldives (BML) has reported issuing a total of MVR 5 billion in loans in 2023.

According to BML, despite inflation rate hikes and geopolitical tensions globally, the Maldives economic growth increased by 6.5% last year, which was reflected on the bank’s performance as well.

BML reported its balance sheet for 2023 observed an MVR 3.8 billion increment, while the bank’s total asset value increased over MVR 45 billion. Additionally, the bank’s operating profit rose by 7 percent, registering MVR 2.7 billion in total.

The bank had earlier announced a record-high profit-after-tax of MVR 2.07 billion in annual terms observed in 2023.

BML’s Director of Retail, Business and SME Banking, Moosa Nimal said the bank issued MVR 5 billion in loans to both businesses and individuals last year, out of which MVR 1.4 billion was specifically issued to individuals and SME segment, which is the highest issuance for the segment in the last five years.

Besides this, the bank further enhanced its personal banking services with new and improved products for general customers and businesses.

Speaking on the new services the bank introduced last year, Nimal said, “Education is a top priority for us, and to assure the Maldivian economy is built on the foundation of strong education, we sliced the Kiyavaa Loan rate from 9% to 5%. Additionally, to qualify individuals to seek loan facilities for housing, we extended the Home Purchase Loan and Financing period to 25 years, and extended the maximum loan amount to MVR 1.2 million without a collateral.”

Additionally, three businesses under the BML Startup Grant successfully began operations last year, while two more were assisted under the grant.

Last year 23,000 new customers joined the bank, surging its customer base to 345,000 in total and 66,000 new bank accounts were opened which include 5,600 business accounts.

Source(s): sun.mv

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Government to hold discussions with America to enhance PayPal services

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Minister of Economic Development and Trade Mohamed Saeed has revealed plans to hold discussions with the American government during the month of July, aiming to bolstering PayPal services in the Maldives and resolve the various challenges individuals encounter in accessing these services.

PayPal is an e-wallet or an application designed to facilitate the transfer of money online. Despite the application being utilised by several Maldivians, they have faced issues in obtaining all the services PayPal offers. As such, Maldivians using PayPal are restricted solely to outbound fund transfers, with no provision for inbound transactions.

Highlighting the commitment of President Dr. Muizzu to expanding online financial transaction avenues, Minister Saeed underscored ongoing efforts to introduce diverse e-wallet services nationwide. Confirming a scheduled official trip to the United States on July 10, the minister revealed intentions to confer with potential digital wallet providers from America. He ensured that the discussions will pertain to address the issues and challenged faced by e-wallet users in the Maldives.

Furthermore, Minister Saeed affirmed that that discussions will extend to establishing agreements with prominent digital wallet entities such as PayPal, Google Pay, and Apple Pay, with a view to enhancing the seamless facilitation of online financial transactions.

In addition to the e-wallets from America, efforts are underway by the government to introduce digital wallets from other countries. Under these initiatives, the Bank of Maldives (BML) has made arrangements such that dollar transactions from foreign platforms and e-wallet services are available since March 31. Among the e-wallets that were made available, WeChat Pay, a popular Chinese e-wallet that facilitates online financial transactions, was also included. Previously, BML halted these services following the COVID-19 pandemic, aiming to prevent the outflow of foreign currency from the nation.

Source(s): PsmNews

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India proposes Free Trade Agreement with Maldives

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Minister of Economic Development and Trade Mohamed Saeed on Saturday announced Indian government’s proposal for a Free Trade Agreement (FTA) between the two countries.

At the press conference held by the Ministry of Economic Development on Saturday to highlight the achievements and initiatives of the state body in the last six months, Minister Saeed said India has expressed interest for a Free Trade Agreement with the Maldives besides a SAFTA.

“President of the Maldives has extended the opportunity to the international community” Saeed commented.

Despite revealing Indian’s proposal for an FTA, Saeed did not disclose further information of the high-level discussion meeting between him and the Indian High Commissioner to the Maldives Munu Mahawar.

The two had discussed on further strengthening the cooperative ties of both nations in multiple areas.

The South Asian Free Trade Area (SAFTA) is the free trade arrangement of the South Asian Association for Regional Cooperation (SAARC).

The agreement came into force in 2006, succeeding the 1993 SAARC Preferential Trading Agreement. SAFTA signatory countries are Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka, and the Maldives.

Under the SAFTA agreement, export duties on Maldives fish products to India were quashed in 2022.

Earlier, during former President Abdulla Yameen Abdul Gayoom’s administration, Maldives government entered into a Free Trade Agreement with China. However, Yameen’s successor, former President Ibrahim Mohamed Solih had criticized the agreement and announced his administration would not honor due to its particulars.

The Maldives-China Free Trade Agreement breathed new life after Dr. Mohamed Muizzu took charge as Maldives President in November 2023. The incumbent President said the agreement was a symbol of strong relations between the Maldives and China, adding his administration was ready to continue honoring the agreement.

While India has expressed interested for an FTA with the Maldives, the relations between the two countries soured earlier after three high-ranking Maldivian officials made derogatory remarks against Indian Prime Minister Narendra Modi.

Moreover, President Dr. Muizzu has been labeled as “pro-China” in several Indian media outlets, but the Maldives head of state had later responded to the claims stating he is “pro-Maldives”.

Source(s): sun.mv

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