Moody’s has changed Maldives’ outlook to stable from negative and maintained the ratings at Caa2.

According to a press release issued by Moody’s today, the shift to a stable outlook reflects reduced external liquidity risks, supported by reforms that increase foreign currency earnings and strong performance in the tourism sector. Moody’s also attributed this change to several government actions and policy reforms that have been implemented. Additionally, Moody’s highlighted that these factors have helped build external buffers, including the Sovereign Development Fund (SDF) and stated that Maldives’ track record of access to bilateral financing further supports an alleviation of external financing pressures.

Further explaining the rationale for changing the outlook to stable from negative, Moody’s highlighted that external buffers which include foreign exchange reserves and SDF assets have notably recovered over the past year, reversing the downward trend from 2024. To demonstrate this, Moody’s evidenced the increase in foreign exchange reserves rising from USD 364 million in September 2024 to USD 859 million in October 2025. Simultaneously, it was observed that the SDF’s USD cash balance has also grown significantly from USD 15 million last year, to USD 126 million as at 9 November 2025. Taking these improvements into account, Moody’s came to the conclusion that the country’s external position has strengthened significantly compared to a year ago, leaving it better placed to manage impending external debt.

Additionally, they noted that this recovery in external buffers is a reflection of the efficiency of the reforms enacted by the government in 2024. This includes increases in dollar denominated taxes and fees, such as TGST and the airport development fee. They also noted that the USD revenue is at USD 1.2 billion, which is 39 per cent higher than the same period last year. Moreover, Moody’s also referred to the government policy of mandating tourism operators to convert dollar revenues to Rufiyaa, which addressed the structural issues in capturing tourism related transactions. They also stated that the Maldives has been successful in obtaining bilateral financing, primarily from India, and that the country's external financial risks have been reduced by the rollovers of debt denominated in dollars, currency swaps, and credit lines.

Overall, Moody’s assessment indicates growing confidence in the Maldives’ ability to navigate external pressures and maintain a more resilient economic footing.