The international credit rating agency Moody’s has maintained the Maldives’ credit rating at Caa2. In a statement released today, Moody’s highlighted key factors considered in maintaining the credit rating, including significant steps taken to strengthen the country’s financial situation. The statement noted that new foreign exchange regulations introduced by the central bank, Maldives Monetary Authority (MMA), and tax reforms implemented by the government are likely to increase foreign exchange reserves.
Moody’s statement also highlighted that the Maldives has achieved success in securing foreign currency financing in recent months. In this regard, the establishment of a currency swap agreement with India in September 2024, amounting to 400 million US dollars and 30 billion Indian rupees, was cited as an important step in improving the Maldives’ financial situation.
Furthermore, Moody’s projected that foreign exchange reserves would increase with the implementation of the government’s tax rate changes. However, the agency also noted that foreign currency constraints are expected to persist, given the significant external debt servicing requirements over the next 12-18 months.
Moody’s further stated that maintaining or improving the current credit rating in the coming days will depend on the Maldivian government’s ability to secure foreign currency financing and successfully implement the fiscal reforms outlined in the 2025 budget approved by the People’s Majlis (Parliament).
