S&P Revises Egypt Credit Outlook to ‘Negative’

On Friday, US credit rating agency Standard & Poor’s (S&P) updated Egypt’s credit outlook to negative from stable. At the same time, they confirmed the country’s ‘B/B’ long and short-term foreign and local currency sovereign credit ratings.

According to S&P, the recent update highlights worries that Egypt’s economic strategies might not be robust enough to stabilize the exchange rate and draw in sufficient foreign currency inflows to address the country’s significant external financing requirements.

The agency anticipates that Egypt will secure external funding from both multilateral and bilateral lenders. However, it has highlighted that there has been an increase in risks associated with the disbursement of these funds.

It added that Egypt risks “further sharp currency devaluations, higher inflation, and rising interest rates” due to delays in structural and currency reforms.

Egypt is suffering from both eye-watering levels of inflation and the effects of Russia’s invasion of Ukraine, being a major buyer of wheat from these two countries.

Egypt’s economy has been in crisis for more than two years, with hardships partly blamed on endemic corruption.

The International Monetary Fund (IMF) and Egypt in January reached a $3 billion loan agreement.