Moody’s place Egypt on review for downgrade

CAIRO - 10 May 2023: Moody's Rating Agency (Moody’s) placed Egypt's B3 long term foreign-currency and local-currency issuer ratings on review for downgrade. Before this rating action, Egypt's ratings were B3 and the outlook was stable.

“The review period will focus on the government's ability to finalize the targeted $2 billion in asset sales necessary to meet the IMF program's financing targets for fiscal 2023 (ending June) and demonstrate the viability of the program's external funding strategy that relies significantly on asset sales,” the statement issued by Moody’s read.

The rating agency is also placing the review on the (P) B3 senior unsecured MTN program rating of the Egyptian Financial Corporation for Sovereign Taskeek, Sukuk Company, and its B3 senior unsecured rating.

Moody's has also placed on review for downgrade Egypt's B3 foreign currency senior unsecured ratings and its (P) B3 foreign currency senior unsecured MTN program rating.

This move comes after Fitch Ratings downgrading Egypt's long-term foreign-currency credit rating to "B" from "B+" for its debt issuances, earlier this week.

In response to Fitch Ratings’ downgrade, Mohamed Maait, the Minister of Finance, stated that the Egyptian economy attracted significant foreign investments during the first half of the fiscal year, as well as financial resources from many international institutions, despite the severity of the global pressures and challenges.

He also added that Egypt’s economy still has the ability to attract foreign inflows, and that the government's measures and reforms to enable local and foreign private sectors to participate in the economy will contribute to a speedy and sustainable return of the Egyptian economy to strong growth.

Earlier today, Egypt’s annual urban inflation rate eased for the first time in nine months to 30.6 percent in April 2023 from 32.7 percent in the previous month and the annual headline inflation rate dropped to 31.5 percent this April, compared to 33.9 percent from last month.