Moody’s Lifts Maldives Outlook to Stable, Affirms Caa2 Rating

Moody’s Ratings has affirmed the Maldives’ sovereign credit rating at Caa2 while upgrading the outlook from Negative to Stable, signalling improving short-term financial stability for the island nation.

The agency said the revised outlook reflects reduced refinancing risks and better-than-expected foreign-exchange liquidity, supported by government measures aimed at strengthening reserve levels and tightening fiscal discipline.

Despite the improved outlook, Moody’s cautioned that the Maldives continues to face significant long-term vulnerabilities, including a heavy external debt burden and reliance on tourism-driven revenue. The Caa2 rating remains unchanged due to these structural risks.

Moody’s noted that a sustained rise in reserves, credible fiscal reforms, and stronger economic diversification could pave the way for a future upgrade, while slippage in reforms or renewed liquidity pressures could once again weigh on the Maldives’ credit profile.