Maldives’ Credit Rating Upgraded to Caa1

Moody’s has upgraded the Maldives’ sovereign credit rating from Caa2 to Caa1, maintaining a stable outlook. The decision, announced on October 8, reflects reduced near-term default risk following major debt repayments and stronger foreign exchange reserves.

The government repaid its US$500 million sukuk in April, settled a US$400 million currency swap facility with India, and repaid US$100 million in securities held by the State Bank of India. It also extended the repayment period of a US$100 million Eurobond to 2031.

Moody’s cited stronger foreign currency inflows, increased savings in the Sovereign Development Fund and continued access to international financing as factors supporting the upgrade.

Despite the improvement, Caa1 remains a high-risk credit rating, and the Maldives continues to face significant debt and fiscal challenges.