Egyptian banks downgraded after country rate cut

  • Share via facebook
  • Tweet this
  • Bookmark and Share
(Getty Images)

(Getty Images)

Five Egyptian banks' local-currency deposit ratings have been downgraded by Moody's Investors Service after the rating agency cut the country's sovereign rating last week because of unsettled political conditions two years after the toppling of Hosni Mubarak's regime. 

National Bank of Egypt SAE, Banque Misr SAE, Banque Du Caire SAE, and Commercial International Bank (Egypt) SAE were downgraded to Caa1 from B3, and Bank of Alexandria SAE was cut to B2 from B1. The baseline credit assessments of Bank of Alexandria and Commercial International Bank, were cut to caa1 from b3, and all banks' foreign-currency deposit ratings to Caa2 from Caa1. All deposit ratings have a negative outlook.

The rating actions "reflect to differing degrees the government's reduced capacity to support the banks; the high credit linkages between the banks' balance sheets and sovereign credit risk; and the downgrade of the foreign currency deposit ceiling for Egypt," the rating agency said.

The North African country's central bank increased interest rates last week for the first time since 2011 prior to rate cuts 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. 

The central bank's foreign currency reserves have plunged more than 60 percent in two years to just over US$13bn, enough to cover less than three months of imports.

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!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Finance talk with RAKBANK

Finance talk with RAKBANK

StartUp sat down with RAKBANK’s head of personal banking, Ian...

Tips from the top: Hisham Al Gurg

Tips from the top: Hisham Al Gurg

High profile investor and entrepreneur Hisham Al Gurg discusses...

1
The hubsters' ecosystem

The hubsters' ecosystem

Tamara Pupic visits Impact Hub Dubai, the first local branch...

Most Discussed
  • 24
    World's most pierced man refused entry to the UAE

    Tolerance has its limits everywhere including Dubai and those who considered Dubai a lawless circus were held accountable...so thank you Dubai authorities... more

    Thursday, 21 August 2014 10:51 PM - Khalil
  • 23
    Baby NOT on board?

    Some of you cry babies need to get your own personal apartments on the plane ! You cry more then the babies I have seen in my travels. LOL more

    Thursday, 28 August 2014 9:10 AM - Jim
  • 21
    Israel “must be punished” over Gaza, says Dubai police chief

    This high moral ground that Mick is talking abt sound very familiar. May I remind Mick that the US & its British ally alone killed over 1 million innocent... more

    Thursday, 7 August 2014 4:12 PM - Mathew