Economic Minister Mohamed Saeed says the Maldives’ financial system is stabilizing and investor confidence is beginning to return.
In an interview with state broadcaster PSM on Thursday, Saeed said the government inherited a deeply troubled economy when President Dr. Mohamed Muizzu took office. He claimed the financial system was “completely broken,” with high levels of debt and no revenue-related borrowing in place.
“The Rufiyaa depreciated, and many things were muddled,” he said, adding that the disorganized state administration had affected the economy and contributed to a drop in the country’s credit rating.
Saeed said the administration’s biggest economic achievement over the past two years has been managing the country without taking on new debt. “Now we are seeing the financial system stabilize, and hopefully confidence is being established,” he said.
Maldivian President Dr. Mohamed Muizzu and Economic Minister Mohamed Saeed at the Invest Maldives Forum in Dubai (Photo/President's Office)
Despite this, international credit agencies have expressed concern. Moody’s maintained the Maldives’ credit rating at CAA2 in May, while Fitch downgraded the rating to ‘CC’ in August last year, citing fears of insolvency.
The Maldives faces a record USD 1.1 billion in debt repayments next year. The central bank has advised the government to accelerate the sale of bonds or sukuk and to prioritize spending to meet the obligation.
Meanwhile, the opposition has voiced doubts about the government’s ability to repay the debt, citing inadequate fiscal measures and a loss of trust from foreign lenders. The government, however, maintains it is confident in its ability to meet the payments.