Capital Intelligence downgrades Egypt

Egypt's long term foreign and local currency sovereign ratings were downgraded to B from BB-

(Getty Images)

(Getty Images)

Egypt's long term foreign and local currency sovereign ratings were downgraded to B from BB- by ratings firm Capital Intelligence, as political uncertainty continues to weaken the North African country's economy.

The rate cut coincided with a further downgrade of Egypt by Moody's Investor Service last week as the uncertainty and continued violence erode confidence in the economy and make the transition to stability in the post Hosni Mubarak era more difficult.

The rating agency said a decline in the central bank's foreign currency reserves (which cover less than three months of imports), the increase in dollarisation levels and the outflow of capital underpinned its decision and illustrated the continuing deterioration of public finances.  

The North African country's central bank increased interest rates last week for the first time since 2011 prior to the moves by Capital Intelligence and Moody's in a bid to curb inflation. The Egyptian pound has lost about 10 percent of its value against the dollar since last year. 

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
Markets cheer Saudi deficit-cutting but finances still hostage to oil

Markets cheer Saudi deficit-cutting but finances still hostage to oil

Cost of insuring against a Saudi sovereign debt default fell...

Saudi-Iran crisis, economic woes strain Oman's neutrality

Saudi-Iran crisis, economic woes strain Oman's neutrality

Oman has never found it easy to balance relations with Saudi...

Oil slump prompts Gulf states to take shine off cushy government jobs

Oil slump prompts Gulf states to take shine off cushy government jobs

High-paying public sector jobs that demand little of workers...

Most Discussed
sponsoredTracking