Tue. May 28th, 2024

Global ratings agency Fitch revised Egypt’s outlook to positive from stable last week.

The agency affirmed Eygpt’s rating at ‘B-‘, citing reduced external financing risks and stronger foreign direct investment.

In March, the International Monetary Fund approved an expanded financial support of $8 billion for the North African country.

The IMF’s loan programme with Egypt should help the country gradually reduce its debt burden, an IMF official said last month.

In February, the country also secured a $35 billion real estate investment from the United Arab Emirates to develop its Mediterranean coast stretch.
Foreign investors have poured billions of dollars into Egyptian treasury bills since the country announced the IMF loan programme. After the investment in the country’s foreign portfolio and the support from UAE, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.

Fitch says that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.

The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter, its foreign debt climbed by $3.5 billion to $168.0 billion.

“Exchange rate flexibility will be more durable partly reflects its close monitoring under Egypt’s IMF EFF, which runs to late 2026,” said Fitch in a statement.

Moody’s revised its outlook on Egypt to “positive” in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.

By Joy

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