Moody’s Upgrades Maldives’ Credit Rating to ‘Caa1’ with Stable Outlook

Credit rating agency Moody’s has upgraded the Government of Maldives’ long-term local and foreign currency issuer ratings from ‘Caa2’ to ‘Caa1’, shifting the outlook to stable, the Ministry of Finance announced.

According to Moody’s report released on 8 October 2026, the upgrade reflects a significant reduction in near-term default risks. Key factors contributing to this decision include the successful repayment of the $500 million Sukuk in April 2026, the settlement of the $400 million currency swap facility with the Reserve Bank of India, and the full settlement of $100 million in Treasury bills invested by the State Bank of India in May and September 2026. Furthermore, the authorities successfully rolled over the $100 million Eurobond due in April 2026 to 2031.

The rating agency also highlighted the government’s sustained efforts to bolster foreign exchange reserves, increased inflows into the Sovereign Development Fund (SDF), and consistent backing from international financial institutions and bilateral partners. Moody’s noted that the robust fiscal and economic policies formulated by the government have been instrumental in achieving these targets.

To mitigate near-term liquidity pressures and strengthen reserve buffers, the government secured concessionary financing this year, including $40 million from the World Bank, $50 million from the Asian Development Bank (ADB), and $40 million from the OPEC Fund. Ongoing engagements with multilateral and bilateral partners continue to focus on securing concessional external financing while ensuring overall debt sustainability.

As a direct outcome of disciplined debt servicing and fiscal measures, total public debt as a share of GDP dropped from 129.2 percent at the end of 2025 to 122.6 percent by July 2026—a level lower than the debt-to-GDP ratio recorded at the close of 2023.

Addressing broader external headwinds, the Ministry of Finance noted that despite potential pressures on fuel prices from ongoing conflict in the Middle East, the Maldives is well-positioned to maintain economic resilience. The ministry reaffirmed its commitment to safeguarding essential public services and driving economic activity within the approved budget framework, prioritizing medium-term macroeconomic stability, renewable energy transition, and commercial infrastructure development.