Fitch downgrades Maldives’ IDR to “CC”

COLOMBO, Aug. 29 (Xinhua) — Fitch Ratings on Thursday downgraded Maldives’ Long-Term Foreign-Currency Issuer Default Rating (IDR) to “CC” from “CCC+”.
Issuing a press release, the leading provider of credit ratings said this downgrade reflects the company’s assessment that intensified pressures from the Maldives’ recently deteriorating external financing and liquidity metrics have made a default event more likely within the rating horizon.
Fitch said their rating is underscored by a recent material decline in the foreign-reserve buffers alongside elevated external debt service and limited external financing inflows.
Maldives’ gross foreign exchange reserves dropped by around 20 percent to 395 million U.S. dollars in July 2024 from 492 million dollars in May 2024. This is the lowest gross foreign exchange reserves level since December 2016, according to Fitch.
The international rating agency said the decline in reserves reflects consistently high current account deficits, significant external debt servicing obligations and ongoing interventions by the Maldives Monetary Authority to maintain the rufiyaa’s peg to the U.S. dollar. ■