Fitch upgrades Maldives sovereign rating to CCC-

Fitch Ratings has upgraded the Maldives' sovereign credit rating from 'CC' to 'CCC-', citing a reduction in near-term default risks following the settlement of a major external debt obligation.

In a statement issued on Wednesday, the credit rating agency said the upgrade reflected the Maldives' successful repayment of its sovereign Sukuk, which matured in April.

According to Fitch, the repayment reduced immediate risks associated with external debt obligations and improved the country's short-term financial outlook.

The agency noted that lower external debt repayments in the near future, together with support from international partners, could help ease fiscal pressures and support the rebuilding of foreign exchange reserves.

Fitch stated that the settlement of the Sukuk removed one of the country's largest external debt obligations and contributed to a reduction in short-term financing risks.

Responding to the rating action, the Ministry of Finance said the upgrade reflected measures implemented by the government over the past year to strengthen public finances and manage debt obligations.

The ministry said these measures included:

According to the ministry, the rating action demonstrates increased confidence in the government's efforts to maintain fiscal stability and meet debt repayment commitments.

The Maldives is also rated by Moody's Investors Service. In November last year, Moody's affirmed the country's rating at 'Caa2' while revising its outlook from negative to stable.

The government has completed several external debt-related payments this year, including:

Credit ratings issued by international agencies are used by investors and lenders to assess a country's ability to meet its debt obligations and can influence borrowing costs and access to international financing.