Fitch affirms Egypt’s rating at ‘B+’ with stable outlook – Egypt Today

Fitch affirms Egypt’s rating at ‘B+’ with stable outlook – Egypt Today

CAIRO - 22 April 2022: Fitch Ratings affirmed Thursday Egypt's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch elaborated in a report that Egypt's ratings are supported by its recent record of fiscal and economic reforms, its large economy with robust growth and strong support from bilateral and multilateral partners. “The ratings remain constrained by weak external liquidity metrics amid still substantial reliance on non-resident investments in the local bond market, large fiscal deficits, high general government debt/GDP, and domestic and regional security and political risks,” it noted. It referred to the decline in the Central Bank of Egypt (CBE) reserves by $4.7 billion to $35 billion in March 2022, after portfolio outflows and CBE interventions to smooth exchange-rate volatility. “At an estimated 3.7 months of current external payments, reserve coverage is now weaker than the 'B' median. CBE's foreign-currency (FC) assets not in reserves, mostly deposits at local banks, which used to be an important backstop, also declined by $7.6 billion to $1.5 billion.” Foreign holdings of Egyptian pound-denominated government debt dropped to $17.5 billion by mid-March, a decline of $11 billion from end-2021 and $16 from their all-time high in September 2021, according