Fitch upgrades Maldives rating amid global headwinds

In their press release on 3 June 2026, Fitch Ratings announced an upgrade to the Maldives’ Long-Term Foreign-Currency Issuer Default Rating. 

The rating upgrade reflects Fitch’s assessment that default risks have eased considerably, following the successful repayment of the USD 500 million Sukuk in April 2026. This was supported by the vital revenue-side reforms implemented by the Government, alongside the implementation of the Foreign Currency Act, aimed at strengthening the Government’s foreign currency inflows. In addition to the reduced external debt servicing requirements, the rating agency states that the government’s access to bilateral and multilateral support will alleviate near-term liquidity pressures and assist in the strengthening of the external reserve buffers. In this regard, the Government has attained additional financing from multilateral sources and is actively engaging with development partners to secure further financing at concessional terms.

The Government will remain prudent to ensure that any new debt does not adversely affect the debt sustainability of the Maldives. Following the significant drawdown of the debt stock by the Government this year, the Maldives’ public and publicly guaranteed debt to GDP has reduced to 121.2 percent by the end of April 2026, a noteworthy decline from 129.9 percent as at the end of 2025. Further, the Government’s actions have ensured that the Maldives is reverting to a sustainable debt trajectory, with public and publicly guaranteed debt to GDP now at a lower level than at the end of 2023.

The Government recognises that the continuing conflict in the Middle East has introduced global headwinds. Nevertheless, the Maldives is better positioned to weather these pressures than in previous cycles, backed by fiscal and monetary policy reforms, as well as an improved external liquidity outlook.