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Debt Management
16 February 2020 Share Tweet

Debt Management is one of the key functions of the Ministry. Effective public debt management reduces financial vulnerabilities, contributes to macroeconomic stability, preserves debt sustainability, and protects the government's reputation among investors. The Ministry sets policies and strategies related to debt management, and closely monitors the performance of the public debt portfolio.

Medium Term Debt Management Strategy

With the enactment of the Fiscal Responsibility Act (FRA) in 2013, the Ministry is required to prepare and submit a Medium-Term Debt Management Strategy (MTDS) to the People’s Majlis (parliament) annually. The MTDS should include public debt targets; the level at which the total public debt would be maintained as a percentage of GDP; the target share of external and domestic debt in the total debt portfolio; the steps planned or currently being taken to mitigate debt related risks; and the utilization of borrowed funds. At present the government uses the World Bank MTDS toolkit to prepare the strategy.

Credit Rating

The sovereign credit rating for the Republic of Maldives is assigned by two of the three major credit rating agencies in the world - Moody’s Investors Service and Fitch Ratings. The first sovereign credit rating issued and published for the Maldives was in September of 2016, where Moody’s assigned a B2 rating for the Maldives. In May of 2017 Fitch Rating became the second rating agency to rate the Maldives, with a B+ rating. Since the initial rating, Maldives has maintained these respective ratings from Moody’s and Fitch.

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Government Securities

The Ministry of Finance (MoF) issues government securities to ensure financing of government deficit. The Maldives Monetary Authority (MMA) acts as the government’s agent for the issuance and management of domestic government securities under an agency agreement signed between MoF and MMA. Additionally, MMA establishes and reviews procedures and systems to ensure that the issuance of government securities is undertaken efficiently and effectively.

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Debt Statistics

Regular debt statistics are generated by the Ministry that shows the total debt outstanding of the central government and breakdowns for government securities borrowing, showing the change in debt level from one period to the other.

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Public Debt Bulletin

The Public Debt Bulletin provides the disbursed outstanding debt of the government including guaranteed and on-lent loans, external and domestic debt breakdowns, and summary debt statistics.

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