By Moody’s International Credit Rating Agency has maintained the Maldives’ credit rating at Caa2, reflecting both the nation’s recent financial achievements and ongoing challenges.
In a statement released today, Moody’s highlighted the proactive measures taken by the Maldivian government to enhance its financial stability. These include the implementation of new foreign exchange regulations by the Maldives Monetary Authority (MMA) and tax reforms designed to strengthen foreign currency reserves.
The report also commended the Maldives for securing significant foreign currency financing, with a special mention of the currency swap agreement established with India in September 2024. This agreement, valued at US$400 million and 30 billion Indian rupees, was identified as a pivotal move toward improving the Maldives’ financial standing. Furthermore, Moody’s acknowledged the potential of newly introduced tax rates to further bolster foreign reserves.
Despite these advancements, Moody’s cautioned that the Maldives continues to face challenges, particularly in managing foreign currency availability amidst substantial external debt servicing obligations over the next 12-18 months.
Looking ahead, Moody’s outlined two critical factors that will influence the country’s ability to maintain or improve its credit rating:
1. The government’s capacity to secure additional foreign currency financing.
2. The effective execution of fiscal reforms proposed in the 2025 budget, recently approved by the People’s Majlis.
Moody’s assessment underscores the delicate balance between progress and persistent challenges in the Maldives’ financial landscape, as the nation continues to navigate its path toward economic resilience.