The Finance Ministry has expressed confidence that Fitch's ratings can be upgraded through the implementation of the government's reform measures. This statement follows Fitch Ratings' downgrade of the Maldives' Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC+' from 'B-'.
Fitch's downgrade comes at a time of declining reserves for the Maldives. According to Fitch, the downgrade to 'CCC+' reflects increased risks due to worsening external financing and liquidity metrics. Fitch has noted that the Maldives faces significant debt repayment challenges, with MVR 9 billion due next year and MVR 15 billion in 2026.
In a statement issued in response to the downgrade, the Finance Ministry said the need for external funding would be significantly reduced with the government's measures to reduce public expenditure to improve the country's financial situation. These reform measures are expected to enhance the government's ability to manage its debt.
The government also assures that the reforms will have a positive impact on the rating in the medium term, making the economy more resilient to external shocks. The Finance Ministry reiterated that the Maldives will honor any debt obligations owed to any party.
