Deposits into the Sovereign Development Fund (SDF) rose by 45.3 per cent as of 16 October 2025, reflecting the Government’s sustained commitment to strengthening the country’s fiscal buffers and improving its ability to meet external debt obligations.

According to the Ministry of Finance and Planning’s Weekly Fiscal Developments report, MVR 1.61 billion has been deposited into the SDF so far this year, compared to MVR 1.11 billion during the same period in 2024. The increase highlights consistent fiscal discipline and continued prioritisation of long-term reserve accumulation.

Established in 2017, the SDF serves as a fiscal reserve to support sovereign debt repayment in times of financial stress, maintain investor confidence, and promote intergenerational equity.

The composition of the fund has also evolved significantly. When President Dr Mohamed Muizzu assumed office, only around 35 per cent of SDF holdings were in US dollars. An audit report released earlier this year revealed that all dollar deposits were converted to local currency in 2020 and 2021. The same report noted that while 94 per cent of the fund was held in US dollars at the end of 2018, this declined to 30 per cent in 2019 and 15 per cent by 2021.

Since then, the Administration has prioritised restoring the foreign-currency share of the SDF to strengthen the country’s ability to service external debt repayments due in 2025 and 2026. The latest figures indicate that total inflows this year already exceed the cumulative deposits of 2023, underscoring progress in rebuilding fiscal resilience.

Credit-rating agencies have taken note of the improvements. Both Moody’s and Fitch have refrained from further downgrades of the Maldives’ sovereign credit rating, citing the strengthened SDF and improved external buffers as stabilising factors.

Moody’s Ratings has maintained the Maldives’ long-term issuer rating at Caa2, highlighting steady growth in foreign-exchange reserves and cautious optimism about fiscal consolidation despite ongoing vulnerabilities. The agency observed that reserves have been rising through 2025, supported by prudent fiscal management, external assistance, and policies designed to bolster foreign-currency inflows.