Fitch Ratings, a global credit rating agency, has upgraded Egypt’s Long-Term Foreign-Currency Issuer Default Rating (IDR), a measure of a country’s ability to meet its financial obligations in foreign currencies, from ‘B-’ to ‘B,’ with a positive outlook as of 1 November. Credit rating agencies assess the creditworthiness of nations and organizations and play a huge role in shaping economic perceptions and influencing borrowing costs, which is the interest rates of funding whereas lower credit means higher borrowing costs and strong rating means lower costs. Their ratings, categorized on a scale ranging from ‘AAA,’ the highest level of creditworthiness, to ‘D,’ which signifies default, are widely used by investors and policymakers to assess risks and opportunities in the global financial markets. One of the primary drivers of Egypt’s recent rating upgrade is the sharp increase in Egypt’s international reserves. Earlier this year, Egypt’s international reserves, which act as a financial buffer, enabling the country to stabilize its currency, service its debts, and weather external economic shocks, had dwindled to alarming levels. According to Al Ahram, Egypt’s international reserves have shown consistent growth, reaching a total of USD 46.9 billion (EGP…
Fitch’s Latest Rating Signals Optimism for Egypt’s Economy
November 26, 2024
By Nadine Tag
Journalist
