Cairo - Mubasher: Capital Intelligence Ratings (CI Ratings) announced that it has upgraded Egypt's long-term foreign and local currency ratings to 'B' from 'B-', according to a report issued on Monday.

The ratings agency also affirmed its short-term foreign and local currency ratings of 'B', as well as the 'Stable' outlook for Egypt's ratings.

CI attributed the upgrade in ratings to the improved macroeconomic management in tandem with the implementation of the conditions of the Extended Fund Facility (EFF) agreed with the International Monetary Fund (IMF) in November 2016.

The report also pointed to the replenished foreign reserves and the alleviation of foreign currency shortages, and the smooth transition to a freely floating exchange rate regime, ending the parallel market.

Egypt also saw limited stabilisation of short-term financing risks due to the regaining of access to international markets, with the government's commitment to introducing reforms to rein in current spending and broaden the tax base.

Maintaining the stable outlook means that Egypt's ratings are likely to remain unchanged over the next 12 to 24 months, provided key credit metrics evolve as envisioned in CI's baseline scenario and no other credit quality concerns arise, the report indicated.

“The 'stable' outlook balances CI's current expectation that reforms and international assistance will contribute to further improvement in Egypt's fiscal and external positions over the next year or so, against still comparatively high underlying economic and political vulnerabilities” concluded the report.