Fitch Ratings has upgraded the Maldives’ sovereign credit rating from ‘CC’ to ‘CCC-’, citing a reduced risk of external debt distress following the Government’s successful repayment of a USD 500 million sovereign Sukuk in April 2026.

The agency said the repayment significantly lowered the risk of default and eased concerns over the country’s external financing position. Fitch also highlighted improvements in foreign currency reserves and debt management as key factors behind the upgrade.

The Government welcomed the decision, describing it as recognition of fiscal reforms and measures implemented over the past two years to strengthen public finances, boost foreign exchange reserves and improve debt sustainability.

The Ministry of Finance and Public Enterprises stated that the improved rating reflects growing confidence in the Government’s ability to meet its debt obligations despite continued uncertainty in the global economy.

Fitch noted that the Maldives has strengthened its external position through reserve accumulation and reforms to foreign exchange regulations. Official reserves exceeded USD 1.3 billion by the end of March, while the Sovereign Development Fund had accumulated more than USD 400 million in foreign currency assets by early April.

The agency also highlighted that the Sukuk was repaid without taking on new external borrowing. In addition, the Government repaid USD 50 million from a bond issued to the State Bank of India and continued servicing obligations linked to a USD 400 million currency swap with the Reserve Bank of India.

The upgrade signifies a reversal from a series of downgrades that began during the COVID-19 pandemic and intensified in 2024 amid concerns over external debt repayments and declining reserves.

While the Maldives remains in highly speculative territory, Fitch’s latest decision signals that immediate default risks have eased and is expected to strengthen investor confidence and improve access to financing.

The Ministry stated that the Government will continue implementing prudent fiscal policies, strengthening reserves and maintaining debt sustainability to support long-term economic stability.