Moody’s Credit Ratings Agency downgraded Egypt’s credit scoring from ‘B3’ to ‘Caa1’ on Thursday, 5 October, pointing to the country’s worsening capacity to handle its debt. The downgrade can be attributed to Egypt’s severe economic crisis and increase in sovereign debt. The downgrade from ‘B3’ to ‘Caa1’ means that Egyptian government bonds carry a “substantial risk” — this is the lowest rating Egypt has ever been given by the agency. However, the credit rating agency indicated that Egypt’s outlook is ‘stable’ due to Egypt’s continued access to financial support from the International Monetary Fund (IMF), which stands at USD 3 billion (EGP 91 billion) arrangement. “Moody’s expects the materialization of asset sale proceeds at the central bank to help restore the economy’s foreign currency liquidity buffer,” the credit rating agency said. The initial market response to the news saw a decline in certain government international bonds, marking their lowest values since May 2023. Minister of Finance Mohamed Maait said that the Egyptian government is working on implementing structural reforms in the upcoming period to address the current challenges. In May 2023, Egypt’s B3 long-term foreign currency and local-currency credit ratings…
Moody’s Downgrades Egypt’s Credit Rating Amidst Ongoing Debt Troubles
October 7, 2023
