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Fitch maintains B+ credit rating for Maldives

Ahmed Aiham
15 May 2019, MVT 09:45
Maldives Monetary Authority (MMA)'s main office building in capital Male. PHOTO: HUSSAIN WAHEED / MIHAARU
Ahmed Aiham
15 May 2019, MVT 09:45

Fitch Ratings, one of the world's leading credit rating agencies, has decided to maintain the Maldives' rating of B+ for the year 2019.

Fitch stated that the 'B+' rating was upheld due to Maldives possessing the means to protect itself from negative blowbacks during a scenario where the foreign-exchange reserves are depleted or low.

Moreover, Fitch noted that productivity levels of Maldives, the progression of the tourism industry, along with structural indicators were prospering.

Additionally, the rating company described a more positive outlook, as it commended Maldives for employing more strategic transparent policies in regards to government expenditures.

Fitch further highlighted the country's efforts to further strengthen bilateral relations and it's socio-economic development.

The administration has taken three important steps in order to improve on the notions put forward by Fitch, including the reveal of President Ibrahim Mohamed Solih's medium-term plan for the country, and a forum specialized for investors.

Previously, the Hong Kong-based agency stated that Maldives' B+ rating reflected the country's potential Gross Domestic Product (GDP) growth prospects, the tourism industry's strong revenue generation capacity, and favourable structural indicators to balance the government's debt and reserves position.

During the administration of former President Abdulla Yameen Abdul Gayoom, then Ministry of Finance and Treasury noted that Fitch Ratings, as well as other agencies, had expressed concerns over Maldives' rising debt.

The first credit ratings agency to rank Maldives was Moody's Investors Service, which rated the Maldives at a B2 in 2016; a similar grade to Fitch's B+.

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