S&P lowers Egypt credit outlook to 'negative'
US credit rating agency Standard & Poor’s (S&P) revised Egypt’s credit outlook from stable to negative on Friday, while affirming the country’s ‘B/B’ long and short-term foreign and local currency sovereign credit ratings.
S&P said the update reflects concerns that Egypt’s economic measures "may be insufficient to stabilize the exchange rate and attract foreign currency inflows to meet the sovereign's high external financing needs."
The agency expects Egypt’s external funding to come from multilateral and bilateral lenders, however noted that "risks to the disbursement of funds have increased."
It added that Egypt risks "further sharp currency devaluations, higher inflation, and rising interest rates" due to delays in structural and currency reforms.
Egypt is suffering from both eye-watering levels of inflation and the effects of Russia's invasion of Ukraine, being a major buyer of wheat from these two countries.
Egypt's economy has been in crisis for more than two years, with hardships partly blamed on endemic corruption.
The International Monetary Fund (IMF) and Egypt in January reached a $3 billion loan agreement.