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Fitch Ratings maintains B+ rating for Maldives despite political crisis

Fathmath Shaahunaz
17 May 2018, MVT 10:59
Maldives Monetary Authority (MMA)'s main office building in capital Male. PHOTO/MIHAARU
Fathmath Shaahunaz
17 May 2018, MVT 10:59

Fitch Ratings, one of the world's leading credit ratings agencies, has decided to maintain the Maldives' rating of B+ despite the ongoing political turmoil in the archipelago.

The Hong Kong-based agency's review comes after extensive meetings with the Maldivian government and the private sector, according to the Ministry of Finance and Treasury.

Fitch stated that the 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.

The finance ministry declared that Fitch's evaluation to maintain the Maldives' rating was a "vindication of the administration's economic agenda". The ministry stated that the government had made good on their economic pledges over the past four years, and that their commitment remained the same.

The ministry further noted that Fitch Ratings as well as other agencies had expressed concerns over the Maldives' rising debt.

"The government acknowledges these challenges and remains ready to tackle them. As such, economic diversification is a primary objective of the foreign investment policies and urban development policies that the administration had pursued in the past years."

The finance ministry went on to proclaim that the points raised by Fitch Ratings in its report were challenges all faced by developing countries. The ministry added that the report serves as a further boost for the government's economic agenda.

This is the first annual review of Fitch Ratings since their initial rating of the Maldives in May 2017.

The first credit ratings agency to rank the 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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