Fitch lifts Maldives’ rating, noting reforms, tourism inflows and April sukuk repayment

Fitch Ratings has upgraded Maldives's credit rating on Wednesday.

Fitch announced Wednesday that it has changed Maldives's credit rating from 'CC' to its next highest rating, 'CCC Minus'

Maldives was downgraded to 'CCC Plus' in June 2024, but was downgraded to 'CC' in August of that year. The rating has been maintained at 'CC' in 2025.

Fitch maintained the country’s downgrade rating on the country’s high debt and the threat of default. The most notable of these was the USD 524.68 million in sukuk due in April this year.

Both Fitch's 'CC' and the current 'CCC minus' rating are described as 'junk' ratings, and the risk of default is now somewhat lower than before. The agency said the sukuk was paid in April last year.

In addition, revenue-raising reforms and foreign exchange earnings from tourism will help the state increase its foreign exchange earnings, Fitch said. The agency also said that the reduction in external debt and external assistance will ease the financial crisis and take steps to avoid debt risk.

Despite these developments, Fitch noted that Maldives faces financial risks. Fitch said Maldives has two fiscal deficits: spending more than revenue and imports more than exports.

In addition, the agency noted the risk of declining currency reserves and the Iran war, as well as the risk of remaining dependent on tourism.

Maldives's April payment of the sukuk was a debt taken by President Solih's government to repay a USD 250 million Sunny Side bond due in 2021. The Finance Ministry said the debt was taken at high interest rates without an adequate policy to repay the debt at a time of fragile global economic conditions.

The Finance Ministry announced the payment on April 2 last year. The debt was paid from the Sovereign Development Fund (SDF) and state reserves.

In the same month, the government announced that the Monetary Authority of Maldives (MMA) had paid off the USD 400 million swap facility under its agreement with the Reserve Bank of India (RBI).

The government passed a record budget this year, mainly due to a total debt of USD 1.1 billion. According to the latest figures released by the Finance Ministry, MVR 8.7 billion has been spent on loan repayments till 14th last month.