The Government’s contributions to the Sovereign Development Fund (SDF) have recorded a 46 per cent increase compared to last year, according to the latest figures from the Ministry of Finance.

As of 28 August 2025, deposits into the SDF stood at MVR 1.3 billion, up from MVR 916.3 million during the same period in 2024. Established in 2017, the SDF serves as a fiscal reserve to safeguard sovereign debt repayment during times of financial stress, maintain credit ratings, and promote long-term savings and intergenerational equity.

While deposits have risen, the composition of the fund has also shifted significantly. When President Dr Mohamed Muizzu assumed office, only 35 per cent of the SDF’s holdings were in US dollars. An Auditor General’s report released earlier this year revealed that all dollar deposits were converted into local currency in 2020 and 2021, leaving only 15 per cent of the fund in foreign currency by the end of 2021. This was a sharp decline from 94 per cent in 2018.

The current Administration has since moved to restore the SDF’s foreign currency base to strengthen the Maldives’ capacity to meet major external debt repayments due in 2025 and 2026.

International rating agencies have taken note of the improvements. Both Moody’s and Fitch have refrained from further downgrading the Maldives’ sovereign credit rating, citing the stronger SDF position as a key factor. Moody’s has maintained the Maldives’ long-term issuer rating at Caa2, highlighting cautious optimism about the country’s economic recovery. The agency also noted that foreign exchange reserves have been steadily rising since October 2024, supported by policy reforms, external financial assistance, and targeted measures to boost foreign currency inflows.