Minister of Finance Moosa Zameer has stated that the USD 300 million sukuk scheduled to be issued through Bank of Maldives (BML) with a government guarantee is an initiative aimed at opening up opportunities to expand private sector investments.

Following the upgrade of the Maldives' credit rating from "CC" to "CCC minus" by Fitch today, Zameer stated in a post on X tonight that the BML sukuk is a financial transaction jointly conducted by the government and the bank to drive medium-term economic growth.

The Minister noted that this initiative will significantly facilitate the development of the tourism sector, particularly in the northern and southern regions of the country.

He further emphasized that, as previously disclosed, the sukuk is not a transaction intended to support the state budget or meet government cash flow requirements. Instead, Zameer explained that the objective of the sukuk is to diversify economic activities outside the Greater Malé area and pave the way for private sector investments.

This expansion will increase state revenue streams, making it easier to achieve fiscal targets set for the coming years, the Minister added.

Fitch Ratings upgraded the Maldives' credit rating primarily due to the full settlement of the sukuk payment that was due this past April. Additionally, Fitch projected that government reforms to boost revenue and new foreign exchange regulations would enhance the country's capacity to generate foreign currency.

Commenting on the matter in a statement released tonight, the Ministry of Finance stated that despite short-term challenges stemming from external conflicts, reforms brought to the country's fiscal and monetary policies have strengthened its resilience against economic shocks.

The ministry stated that the government's objective remains managing state expenditures within the approved budget while ensuring the uninterrupted delivery of public services.

Finance also noted that the upgrade in the Maldives' credit rating, after remaining low for the past two years, is a clear indication that investor confidence is being restored.