The rating action reflects Moody’s assessment of the Maldives’ improved external sector position, fiscal consolidation, economic resilience, and the renewed assurances of access to foreign financing through bilateral means.
Corporate Maldives
In their press release on 27 November 2025, Moody’s Ratings announced the rating action, affirming the Maldives’ long-term local and foreign currency issuer ratings at Caa2, and changing the outlook to stable from negative.
The rating action reflects Moody’s assessment of the Maldives’ improved external sector position, fiscal consolidation, economic resilience, and the renewed assurances of access to foreign financing through bilateral means. Moody’s further highlighted the improvement in the country’s foreign currency reserves since the last rating action in December 2024. The press release by Moody’s also asserts that this shift is structural in nature and the direct result of the reforms to both fiscal and monetary policy.
The Government implemented rate revisions to all major foreign currency-denominated taxes and fees commencing December 2024. This includes hikes in the rates of Airport Taxes and Fees, Green Tax, and Tourism Goods and Services Tax. In addition, the enactment of the Foreign Currency Act and Regulation sought to address the structural challenges in capturing foreign currency transactions outside the country’s banking system, allowing the Maldives Monetary Authority to assist the financial sector in meeting its foreign currency needs.
Alongside these changes, the overall economy demonstrates remarkable resilience, driven by the robust growth in the tourism sector. This is particularly highlighted with the surpassing of 2 million tourist arrivals year-to-date, reflecting a 10 percent growth year-on-year. The implementation of both fiscal and monetary sector reforms saw the foreign currency reserve position improve from USD 616 million in November 2024 to USD 866 million as of October 2025.
Moody’s also highlighted the increase in the available cash balance of the Sovereign Development Fund (SDF) from USD 15 million last year to USD 126 million as of 9th November 2025. This is in relation to the hike in the rates of the Airport Development Fee, which is deposited directly into the SDF. Additionally, foreign currency-denominated Government revenues year-to-date are in excess of USD 1 billion, reflecting a 39 percent increase year-on-year.
In addition to these policy changes, the Government continues to maintain and build upon close bilateral ties with our development partners. The recent rollover of the swap facility from the Reserve Bank of India and the successful conclusion of the refinancing efforts with close bilateral partners demonstrate the country’s access to foreign financing.
The Government is currently engaged in coordinated efforts with bilateral, multilateral, and commercial partners to meet its medium-term financing needs, including the refinancing of the USD 500 million Global Sukuk maturing in 2026. Through stringent controls on expenditures, the medium-term Budget recently passed by the Parliament envisages the improvement of fiscal balances, thereby reducing the Government’s financing needs. The Budget also plans for the utilisation of the proceeds into the SDF towards the repayment of external debt obligations, to reduce and further contain the elevation of debt-to-GDP in the medium-term.
The rating action demonstrates the Government’s long-term commitment to fiscal consolidation and the attainment of fiscal and debt sustainability to ensure macroeconomic stability.
