Global Courant 2023-05-07 14:35:23
Egyptian Finance Minister Mohamed Maait reacted to Fitch’s decision to downgrade Egypt’s credit rating in both local and foreign currencies to “B” with a negative outlook.
The move reflects the institution’s view on estimates of the external financing needs of the Egyptian economy, in light of the unfavorable conditions of global financial markets for all emerging countries, he noted.
Maait said this also reflects the institution’s estimates due to the continued exposure of the Egyptian economy to difficult external pressures due to the complex global challenges represented by the negative impact of the war in Europe, the global wave of inflation and the rise in interest and loan interest.
He cited the cost of borrowing as a result of the restrictive policies of central banks around the world, which led to a wave of capital outflows from emerging markets.
The minister added that the Egyptian economy attracted large foreign investment during the first half of the fiscal year and also attracted funding from many international institutions.
Fitch downgraded Egypt’s rating from “B+” to “B”while reshaping its outlook to negative, indicating that it could downgrade further in the coming months due to the country’s economic problems.
The credit rating agency noted the increase in external financing risks in light of the high financing requirement and the tightening of external financing conditions.
All of this comes against the backdrop of a state of extreme uncertainty over exchange rates and the decline in external liquidity reserves, Fitch said in a statement.
It pointed out that the occurrence of further delays in the transition to the flexible exchange rate policy will lead to a further deterioration in confidence and possibly delays in the implementation of the International Monetary Fund’s programme.
Cairo responds to Fitch assessment of Egypt’s economy
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