International credit rating agency Moody’s has upgraded the Maldives’ sovereign credit rating from Caa2 to Caa1 with a stable outlook, reflecting improving fiscal conditions, stronger foreign exchange reserves and reduced near-term debt repayment risks.
The Ministry of Finance and Public Enterprises said the rating upgrade recognises the positive results of the Government’s fiscal and financial policies, including progress in meeting external debt obligations and measures introduced to strengthen the country’s overall financial resilience.
Among the key developments highlighted were the repayment and settlement of a USD 500 million sukuk in April 2026, the settlement of a USD 400 million currency swap facility, and the repayment of USD 100 million in Treasury Bills during May and September. The maturity of a USD 100 million Eurobond was also extended to 2031, helping ease immediate repayment pressures and improve the country’s debt profile.
Moody’s also noted the strengthening of the Maldives’ foreign exchange reserve position and the increase in funds accumulated in the Sovereign Development Fund. According to the Finance Ministry, foreign exchange measures introduced since 2024 have supported higher foreign currency inflows into the domestic banking system, contributing to improved official reserves and greater financial buffers.
The Government has further strengthened its financial position through support from international financial institutions, securing a total of USD 130 million in assistance. This includes USD 40 million from the World Bank, USD 50 million from the Asian Development Bank and USD 40 million from the OPEC Fund.
Government debt has also recorded a notable decline relative to the size of the economy. Finance Ministry figures show that debt, which stood at 129.2 percent of GDP at the end of 2025, had fallen to 122.6 percent by the end of July 2026. The Ministry attributed the improvement to continued debt repayments and prudent fiscal management.
The stable outlook accompanying the upgrade signals greater confidence in the Maldives’ near-term financial position as the Government continues efforts to manage debt, strengthen reserves and maintain expenditure within the approved budget.
At the same time, the Government is maintaining its focus on protecting essential public services and supporting economic activity while remaining attentive to external risks, including uncertainty in the global economy and fluctuations in international energy prices.
The latest rating action provides a positive indication of improving confidence in the Maldives’ fiscal management and its capacity to strengthen financial stability while sustaining economic development.
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