MALE, Oct. 8 (Xinhua) -- Moody's Ratings has upgraded the Maldives' credit rating to Caa1 from Caa2 with a stable outlook, citing a material reduction in the government's near-term default risk, the country's Ministry of Finance and Public Enterprises said on Thursday.
The ministry said the upgrade followed the successful repayment of a 500-million-U.S.-dollar sukuk bond in April, settlement of a 400-million-dollar currency swap facility from the Reserve Bank of India, and 100 million dollars in securities investments from the State Bank of India in May and September.
Moody's also took into account the rollover of a 100-million-dollar Eurobond until 2031, stronger foreign exchange inflows and continued access to bilateral and multilateral financing.
The rating agency also recognized the coordination between the government and the Maldives Monetary Authority on fiscal and monetary policy, as well as foreign currency revenue reforms and measures requiring foreign currency exchange through the domestic banking system.
These measures, introduced from 2024 and expanded in 2026, are expected to support foreign currency inflows and the accumulation of gross international reserves and the Sovereign Development Fund.
The Maldives has also secured 40 million dollars from the World Bank, 50 million dollars from the Asian Development Bank and 40 million dollars from the OPEC Fund, while continuing discussions with development partners for further concessional financing.
Public and publicly guaranteed debt fell to 122.6 percent of GDP by the end of July 2026 from 129.2 percent at the end of 2025, according to the ministry.
However, the ministry said the ongoing conflict in the Middle East continued to pose downside risks to the Maldivian economy, mainly through higher energy prices.
The government said its priorities include improving the external sector, maintaining macroeconomic stability, accelerating the transition to renewable energy and strengthening trade infrastructure. ■
