CAIRO – 19 January 2024: Moody's Investors Service (Moody's) has revised Egypt's outlook from "stable" to "negative" due to growing concerns about the country's credit profile but kept its credit rating unchanged at “Caa1.”
The agency points to the challenging macroeconomic environment and the exchange rate rebalancing as factors contributing to the weakening credit profile.
Despite financial support the Egypt has received from the International Monetary Fund (IMF), Moody's warns that policy actions and external assistance may not be sufficient to prevent a debt restructuring, given the country's weak debt metrics.
The agency highlights the significant increase in interest payments and external pressure, which have complicated the macroeconomic adjustment process.
However, Moody's acknowledges Egypt's track record of implementing fiscal reforms, which may contribute to paving the way for further financial support from the IMF.
In a statement on Friday, the Ministry of Finance commented on Moody's decision, saying it “did not take into account the government's ongoing efforts.”
The ministry added that the government’s Initial Public Offering (IPO) program strengthens Egypt's ability to meet its financing needs over the next two years and attract more investment inflows, reducing the need for external financing.
The statement highlighted the success of the state in withdrawing from several economic activities at a value of $3.5 billion within the program, which helps increase foreign currency inflows to cover the Egyptian economy's needs.
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