Home Global Ties Moody’s Upgrades Egypt Ratings

Moody’s Upgrades Egypt Ratings

48
Moody’s Upgrades Egypt Ratings

(3 Minutes Read)

The positive outlook reflects significant official and bilateral support announced and marked policy steps taken in the past week that will if maintained, support macroeconomic rebalancing, the note said.

Moody’s upgraded its outlook on Egypt from “negative” to “positive”, affirming the Caa1 long-term foreign and local currency issuer ratings.

In a comprehensive report, Moody explained that the shift in Egypt’s outlook is a reflection of noteworthy official and bilateral support, coupled with significant policy measures recently implemented by the government. These actions are expected to contribute to the macroeconomic rebalancing of the country.

The positive outlook reflects significant official and bilateral support announced and marked policy steps taken in the past week that will support macroeconomic rebalancing, the note said.

Of particular mention in the report was the substantial contribution of foreign direct investment from the Government of the United Arab Emirates. This influx of investment is anticipated to significantly boost Egypt’s foreign exchange reserves and cover the estimated external financing gap until fiscal 2026, which concludes in June of that year, according to Moody’s projections.

The report also emphasized a considerable reduction in the downside risks that had prompted Moody’s to revise the outlook to negative back in January.

The positive outlook for Egypt was attributed to a remarkable shift in economic policy, including a substantial devaluation of the national currency and an increase in interest rates.

Last week, the IMF raised Egypt’s loan to USD8 billion instead of USD3 billion “amid significant macroeconomic challenges that have become more complex to manage with the impact of the recent conflict in Gaza on tourism and Suez Canal receipts” the IMF statement read. The World Bank and the European Union, Egypt’s development partners, will provide new soft loans worth USD12 billion to the country based on the new IMF deal.

Read Also: 

https://trendsnafrica.com/egypt-gets-a-bailout-deal-of-usd-8-billion-prime-minister-madbouly/

https://trendsnafrica.com/egypt-receives-usd-5-billion-as-first-tranche-of-ras-el-hekma-deal-with-uae/

In February, Egypt and the UAE signed an investment real estate deal to develop Ras El Hekma city in North Coast with USD 35 billion in investments, Egypt already received USD 15 billion as a first tranche.