Moody's, the world's largest credit rating agency, has upgraded the Maldives' credit rating from 'Caa2' to 'Caa1' and changed its economic outlook to 'Stable'.
Moody's report released today stated that this is a decision made following a significant reduction in the fear of default in the near future, driven by measures taken by the Maldivian government to repay large debts and ensure financial security.
According to a statement issued by the Ministry of Finance today following the upgrade in Moody's rating, the main reasons for this rating upgrade include the repayment and settlement of a USD 500 million sukuk in April of this year and the repayment of a USD 400 million currency swap facility. The Finance Ministry also stated that the Maldivian government's repayment of a total of USD 100 million in treasury bills in May and September of this year was also a contributing factor.
The Finance Ministry noted that extending the repayment period of the government's 100 million dollar Eurobond to 2031 also reduced the tightness in debt repayment in the near future.
The ministry stated that Moody's highlighted the strengthening of the Maldives' foreign exchange reserves, the increase in funds deposited into the Sovereign Development Fund, and the growing confidence in obtaining financial assistance from international financial institutions and neighboring countries.
The Finance Ministry also stated that the agency acknowledges the soundness of government policies in achieving these advancements.
According to the Finance Ministry, citing Moody's, the foreign exchange-related measures implemented by the government starting in 2024 have increased the foreign currency entering the Maldives' banking system, raising the funds available in official reserves and the Sovereign Development Fund.
The ministry added that these measures, along with reduced expenditures for foreign debt repayment, provide assurance of further sustaining the Maldives' financial situation.
The Finance Ministry stated that the financial capacity of the Maldives has been further strengthened due to assistance received from international financial institutions. In this regard, the government has secured a total of USD 130 million in assistance, including USD 40 million from the World Bank, USD 50 million from the Asian Development Bank, and USD 40 million from the OPEC Fund.
According to Finance Ministry statistics, state debt, which stood at 129.2 percent as a proportion of GDP by the end of 2025, dropped to 122.6 percent by the end of July 2026. The ministry stated that this is the result of efforts made to repay debt and the sound fiscal policies pursued.
The Finance Ministry's statement noted that while remaining mindful of the challenges that may arise from rising energy prices due to the Middle East conflict, safeguarding citizens' basic needs, supporting economic activities, and keeping state expenditures within the budget are among the government's highest priorities.
