Wednesday, 20 October, 2021

Moody’s maintains Egypt’s stable outlook

Moody’s maintains Egypt’s stable outlook

RIYADH: Moody’s affirmed the long-term foreign and local currency issuance ratings for Egypt at B2 and maintained a stable outlook for the Arab world’s most populous nation.

The credit rating agency also affirmed Cairo’s foreign currency senior unsecured ratings at B2, report agencies.

Continued exposure to volatile financing conditions driven by weak debt affordability and high gross borrowing requirements, balanced against improving shock resilience evidenced during the pandemic as a result of the government’s track record of economic and fiscal reform implementation are the basis for Moody’s latest assessment of Egypt’s issuer ratings. Moody’s also left Egypt’s local currency ceiling unchanged at Ba2 but raised its foreign currency ceiling to Ba3 from B1 previously.

While acknowledging a higher rating for local currency, which is three notches above the country’s sovereign rating, Moody’s took into account the country’s bloated public sector. Moody’s also warned of Cairo’s vulnerability to potential liquidity and external financing shocks as a result of the pandemic and volatile external liquidity conditions.