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CI affirms Egypt's rating; Stable Outlook

CI affirms Egypt's rating; Stable Outlook
Photo Credit: Arabianeye-Reuters

Cairo-Mubasher: Capital Intelligence (CI) has affirmed Egypt's Long-Term Foreign and Local Currency Sovereign Ratings of 'B-' and its Short-Term Foreign and Local Currency Ratings of 'B'. It also affirmed Egypt’s outlook at 'Stable'.

CI notes that near-term external financing risks have stabilised, supported by the financial assistance package received from the member states of the Gulf Cooperation Council (GCC).

International reserves are expected to continue to increase – provided that the political and geopolitical situations do not deteriorate – but are unlikely to reach pre-crisis levels. Nevertheless, CI expects foreign reserves to provide broadly adequate coverage of short-term external debt (on a remaining maturity basis) and a reasonable buffer against moderate external economic shocks.

The Outlook for the ratings is 'Stable'. This means that Egypt's ratings are likely to remain unchanged over the next 12-24 months, provided key credit metrics evolve as envisioned in CI's baseline scenario and no other credit quality concerns arise, according to CPI Financial website.

The 'Stable' Outlook reflects CI's current expectation that Egypt's fiscal and external position will stabilise over the next year or so, based on the continuation of external support and the increasing likelihood that the new government will continue its gradual structural reforms.