MMA Reassures on Debt Repayment After Moody’s Downgrade

The Maldives Monetary Authority (MMA) issued a statement after Moody's downgraded the country's credit rating to CAA-2, reassuring that the government will meet all external debt obligations, including a bond repayment due in October 2024. Moody's cited high credit risk, dwindling dollar reserves, and mounting debt. The MMA acknowledged challenges but expressed confidence in debt servicing. It projected GDP growth of 4.9% in 2024 and 6.5% in 2025, driven by tourism, with a 10% year-on-year increase in tourist arrivals to 1.3 million by end-August 2024. Gross international reserves rose to $444 million in August from $395 million in July, with net reserves at $61 million. The MMA expects reserves to surpass the $606 million budgeted for 2024. To stabilize forex, it plans revisions to the Monetary Regulation in September 2024 and will begin Open Market Operations to reduce surplus liquidity of MVR 6.7 billion. Fitch had also downgraded the country in August.

The Maldives Monetary Authority (MMA) issued a statement after Moody's downgraded the country's credit rating to CAA-2, reassuring that the government will meet all external debt obligations, including a bond repayment due in October 2024. Moody's cited high credit risk, dwindling dollar reserves, and mounting debt. The MMA acknowledged challenges but expressed confidence in debt servicing. It projected GDP growth of 4.9% in 2024 and 6.5% in 2025, driven by tourism, with a 10% year-on-year increase in tourist arrivals to 1.3 million by end-August 2024. Gross international reserves rose to $444 million in August from $395 million in July, with net reserves at $61 million. The MMA expects reserves to surpass the $606 million budgeted for 2024. To stabilize forex, it plans revisions to the Monetary Regulation in September 2024 and will begin Open Market Operations to reduce surplus liquidity of MVR 6.7 billion. Fitch had also downgraded the country in August.

The Maldives Monetary Authority (MMA) issued a statement after Moody's downgraded the country's credit rating to CAA-2, reassuring that the government will meet all external debt obligations, including a bond repayment due in October 2024. Moody's cited high credit risk, dwindling dollar reserves, and mounting debt. The MMA acknowledged challenges but expressed confidence in debt servicing. It projected GDP growth of 4.9% in 2024 and 6.5% in 2025, driven by tourism, with a 10% year-on-year increase in tourist arrivals to 1.3 million by end-August 2024. Gross international reserves rose to $444 million in August from $395 million in July, with net reserves at $61 million. The MMA expects reserves to surpass the $606 million budgeted for 2024. To stabilize forex, it plans revisions to the Monetary Regulation in September 2024 and will begin Open Market Operations to reduce surplus liquidity of MVR 6.7 billion. Fitch had also downgraded the country in August.

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