Moody’s Ratings has upgraded the Maldives’ sovereign credit rating from Caa2 to Caa1, with a stable outlook, reflecting a significant reduction in the country’s near-term risk of default.
The Ministry of Finance and Public Enterprises said the upgrade reflects progress made in strengthening the country’s debt repayment capacity, improving foreign exchange inflows and reserves, and maintaining access to international financing.
Several major debt obligations were settled during 2026. These include the repayment of the US$500 million sukuk in April, the settlement of a US$400 million currency swap facility with the Reserve Bank of India, and the settlement of US$100 million in securities held by the State Bank of India in May and September.
The government also extended the maturity of a US$100 million Eurobond to 2031, reducing immediate external debt repayment pressures.
Moody’s also recognised improvements in the management of foreign exchange and greater coordination between fiscal and monetary authorities. Foreign exchange measures introduced since 2024 have contributed to increased foreign currency inflows through the domestic banking system, supporting the accumulation of official reserves and the Sovereign Development Fund.
The government has also continued to secure financial support from international development partners. During 2026, the Maldives secured US$40 million from the World Bank, US$50 million from the Asian Development Bank and US$40 million from the OPEC Fund for International Development, bringing total assistance from these institutions to US$130 million.
According to Ministry of Finance figures, public and publicly guaranteed debt declined from 129.2 percent of GDP at the end of 2025 to 122.6 percent by the end of July 2026. The ministry said the decline reflects substantial debt repayments and the implementation of prudent fiscal policies aimed at placing public debt on a more sustainable path.
Despite the improved rating, the government noted that the Maldives remains exposed to external economic risks, including instability in the Middle East and higher energy prices. Measures have been introduced to protect vulnerable groups while maintaining support for economic activity and essential public services.
The government said its key priorities going forward are to achieve near-term fiscal and macroeconomic targets, strengthen the country’s external financial position and maintain macroeconomic stability.
It also plans to accelerate the transition towards renewable energy and strengthen trade-related infrastructure to increase economic capacity, resilience and long-term sustainability.
The Ministry of Finance said the government will continue to seek budgetary financing while ensuring that new financing does not undermine the long-term sustainability of Maldives’ public debt.
