Speaker of the Parliament and former President Mohamed Nasheed says the Maldives has to listen to international indicators including the Fitch Ratings, a provider of credit ratings to countries and companies around the world.
In a tweet, the Speaker said that although the Maldives should acknowledge the recent downgrade in credit ratings for the country as announced by Fitch, the country would not default if it can restructure its external debt, especially to Chinese commercial institutions.
He went on to say that with tourism and travel bouncing back, he remained optimistic that the country can recover economically.
This comes after Fitch Ratings has downgraded the Maldives' Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC' from 'B'.
It said that the downgrade of the Maldives' IDRs to 'CCC' reflects Fitch's expectation of deeper and more prolonged external liquidity pressures than previously forecast, and a sharp increase in the country's debt burden as a result of the coronavirus shock and continued debt-funded infrastructure spending.
Fitch said that In recent months, the authorities have succeeded in securing new external financing, but foreign-currency buffers remain low and it will be difficult for the Maldives to generate foreign-exchange inflows without normalization of tourist activity.
It noted this shock has made the country heavily dependent on the international community for support through bilateral and multilateral financing.
In a statement following this announcement, the Maldivian government said that since the economic outlook projects a more promising recovery with recent policies, the government of the Maldives disagrees with this downgrade and the assessment of Fitch Ratings for this decision.
The government reminded that the Maldives has never defaulted in its debt obligations so far and is fully committed to ensuring that principal and interest for its sovereign bonds are fully paid and in a timely manner.
