ADVERTISEMENT

Investing

Egypt Upgraded By Fitch as Fiscal Reforms Pay Off

Tourists look out towards the city skyline from the Citadel of Saladin, in Cairo, Egypt, on Monday, Dec. 18, 2023. Egyptian President Abdel-Fattah El-Sisi was re-elected for a third term by a landslide, extending to 2030 his rule over the North African nation that’s mired in its worst economic plight in decades. Photographer: Islam Safwat/Bloomberg (Islam Safwat/Bloomberg)

(Bloomberg) -- Egypt’s credit rating was upgraded by Fitch Ratings for the first time since 2019, the latest boost for the economy emerging from two years of crisis after securing a $57 billion global bailout.

Fitch upgraded the North African country’s rating one level to B from B-, with a stable outlook, according to a statement on Friday. The agency attributed the change to lower external risk, policy adjustment, replenished external buffers, new capital inflows and a more flexible exchange rate.

“Egypt’s external finances have been bolstered by the Ras El-Hekma foreign investment, non-resident inflows into the debt market, and new IFI financing, facilitated by improved policy settings, including greater exchange rate flexibility and tighter monetary conditions,” Fitch said.

Egypt delivered its biggest-ever interest-rate hike and allowed its currency to weaken about 40% against the dollar in March, seeking to resolve a chronic foreign-currency shortage and unlock foreign funding after months of uncertainty.

Authorities, who agreed an expanded International Monetary Fund program, are now seeking to drum up investment via a state divestment program and cut subsidies on fuel and electricity in recent months in a bid to rein in spending.

The Washington-based lender’s chief will travel to Egypt next week for talks on the $8 billion program that authorities have said is becoming harder to enact with the Middle East in turmoil

Egyptian long-term foreign currency debt rating was affirmed by S&P at B- in October, with keeping positive outlook. Moody’s Ratings assigns Egypt at Caa1, with positive outlook.

Statement: Fitch Upgrades Egypt to ‘B’; Outlook Stable

©2024 Bloomberg L.P.