One of the world's largest credit rating agencies, Moody's, has maintained the Maldives' most recent CAA2 rating.

Moody's downgraded the Maldives' rating from CAA1 to CAA2 last September. The CAA2 rating is given to countries with poor financial conditions and a potential risk of defaulting on debt.

In a statement released today, Moody's highlighted the main factors considered in maintaining the credit rating, including important measures taken to strengthen the country's financial situation compared to before. The statement noted that the new foreign currency regulations introduced by the central bank, Maldives Monetary Authority (MMA), and the tax reforms implemented by the government are likely to increase foreign currency reserves.

Moody's statement also highlighted the successes achieved in securing foreign currency financing for the Maldives. It mentioned that the establishment of a currency swap agreement with India in September 2024, worth 400 million US dollars and 30 billion Indian rupees, is an important step towards improving the Maldives' financial situation.

Furthermore, it is estimated that foreign currency reserves will increase as the government's tax rate changes are implemented.

Moody's said that while significant expenditure is expected for external debt servicing in the next 12-18 months, difficulties in obtaining foreign currency are likely to persist. The agency also stated that maintaining or improving the current credit rating in the coming days will depend on the 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.