2023-10-20 21:32:00
12:32 AM Saturday, October 21, 2023
Books – Mustafa Eid:
Standard & Poor’s credit rating agency announced a new decision regarding Egypt on Friday, lowering the long-term local currency and foreign currency sovereign debt rating from B to B- with a stable outlook.
The agency attributed its decision to the fact that the slow progress in the main monetary and structural reforms in Egypt led to a delay in the disbursement of funds, both from multilateral and bilateral parties, which are considered necessary to cover Egypt’s high needs for external financing, according to a statement on Friday.
She explained that the repercussions of this delay include the continued shortage of foreign currencies, the wide gap between official and unofficial exchange rates, a decline in remittance flows, and weak private sector confidence and growth.
This coincides with the International Monetary Fund postponing the first and second reviews of the economic reform program in which it is cooperating with Egypt, amid demands from it to the Egyptian authorities to quickly return to commitment to exchange rate flexibility, after the progress achieved by the government in the file of selling some government assets.
In his recent statements, Dr. Mohamed Maait, Minister of Finance, estimated Egypt’s financing gap during the current fiscal year at a value ranging between 6 and 8 billion dollars.
The price of the dollar has witnessed a noticeable rise in recent days, reaching levels between 43 and 44 pounds, according to what sources told Masrawy recently, coinciding with some restrictions and stopping the use of some types of bank cards with a balance in the local currency abroad.
Standard & Poor’s said that the stable outlook balances the risks represented by the possibility that the Egyptian authorities will be unable to finance high external debt recoveries or address the country’s foreign currency shortage, and the possibility of accelerating major monetary and economic reforms that would help bridge the large external financing gap. in Egypt.
Data recently published by the Central Bank on its website showed Egypt’s commitment to repaying foreign debts owed to it amounting to about $29.229 billion (including interest and debt installments) during the next year 2024, with it repaying about $19.434 billion in 2025.
Moody’s, the credit rating agency, decided two weeks ago to lower Egypt’s sovereign debt rating to Caa1 instead of B3.
Last April, Standard & Poor’s announced that Egypt’s sovereign debt rating in local currency and short-term and long-term foreign currencies was fixed at “B” while amending its future outlook to negative from stable.
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