Moody's Adjusts Egypt's Outlook to Positive

Moody's credit rating agency announced that it has decided to change Egypt's outlook to positive, confirming its rating at CAA1.

The agency said in its statement that the change in the outlook for the Egyptian economy reflects the great support that was announced and the noticeable steps that were taken at the policy level during the past week.

It added that confirming the rating reflects the high debt ratio in Egypt and the weak ability to bear debt compared to its counterparts.

Mohamed Maait, Minister of Finance confirmed that Moody’s announcement of the credit rating agency changing its outlook on the future of the Egyptian economy from negative to positive paves the way for improving Egypt’s credit rating during the coming period.

Two days ago, the Central Bank of Egypt (CBE) decided to raise interest rates by 600 basis points in a surprise meeting, announcing that the market would determine the exchange rate.

It stressed that unifying the country's exchange rates is "crucial," explaining that it will allow the exchange rate to move according to market mechanisms.

As a result, the value of the pound fell to nearly 50 pounds against the dollar.

The IMF also agreed, on Wednesday, to increase the value of Egypt’s loan to $8 billion, from $3 billion, which had been agreed upon in December 2022.

According to a press conference of the Egyptian government and representatives of the International Monetary Fund, it was announced that an agreement had been reached at the expert level regarding the first and second review of Egypt’s program.

It is noteworthy that the Institute of International Finance had expected, in a recently issued report, that Egypt’s total foreign exchange reserves would reach more than $50 billion, or enough for 8 months of imports, by the end of the current fiscal year.

Last Tuesday, the Central Bank of Egypt revealed that net foreign exchange reserves had risen to $35.31 billion at the end of February, from $35.25 billion at the end of January.