Fitch, a credit rating agency has upgraded Egypt’s rating from “B-” to “B” citing tighter monetary circumstances and the country’s improved financial standing thanks to a number of foreign investments and assistance.
“Egypt’s external finances have been bolstered… FX buffers have recovered, and we have somewhat greater confidence that the more flexible exchange rate policy will prove more durable than in the past,” Fitch said, as it also assigned Egypt a stable outlook.
As it attempts to recover from a protracted economic crisis that has resulted in record inflation, a growing debt load, and significant currency devaluations over the last two years, the North African country has been looking for significant investments.
In order to stabilise its economy, Egypt obtained a $8 billion loan package from the International Monetary Fund (IMF) this year, along with a $35 billion real estate investment package from Abu Dhabi and about $1 billion from the EU.
The IMF insisted that the loan amount was suitable, despite Egyptian President Abdel Fattah al-Sisi’s suggestion last month that his government should reevaluate the agreement in light of the country’s growing regional concerns.
Fitch also cautioned on Friday that Egypt faces a significant risk from a further escalation of the regional conflict.
Yemen’s Houthi attacks on Red Sea ships have caused trade to be rerouted from the Suez Canal, which has negatively impacted tourism and Egypt’s revenue stream. There are also dangers associated with the larger Middle East conflict.
