Moody’s keeps Maldives at Caa2, raises outlook to ‘stable’
The change reflects improvements in the country’s economic position following fiscal policy measures introduced by the government.
The international credit rating agency Moody’s on Thursday maintained the Maldives’ credit rating at Caa2 while revising its previous ‘negative’ outlook to ‘stable’.
Moody’s placed the Maldives’ rating to Caa2 in September last year, at which time the economic and fiscal outlook was assessed as ‘negative’. The agency has now kept the rating unchanged but revised the outlook to ‘stable’.
In its statement, Moody’s said the change reflected improvements in the country’s economic position following fiscal policy measures introduced by the government. The agency highlighted several factors, including:
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Higher airport taxes and fees, green tax, and T-GST rates, which have supported foreign exchange earnings.
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Increases in official reserves and foreign exchange liquidity due to the enforcement of foreign exchange laws and regulations.
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Growth in the Sovereign Development Fund (SDF), with its balance rising to USD 126 million as of 9 November from USD 15 million the previous year.
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Government control of expenditure and a reduction in the budget deficit for 2025.
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Credit lines and currency swap arrangements provided by countries such as India.
Moody’s noted that the Maldives continues to face challenges, including USD 500 million in Sukuk and other debt maturing next year, but said improvements in reserves and the SDF would support upcoming repayments.
Following the rating announcement, the Ministry of Finance said the revised outlook to ‘stable’ reflects the impact of fiscal measures undertaken over the past year. The ministry said the government has implemented steps to address the debt situation and work towards sustainable fiscal restructuring.
In June, Fitch Ratings maintained the Maldives’ sovereign credit rating at ‘CC’.
