Moody’s reviews Egypt for downgrade

Moody's Investors Service said it placed Egypt's B3 long-term foreign-currency and local-currency issuer ratings on review for downgrade. Moody's also placed on review for downgrade Egypt's B3 foreign-currency senior unsecured ratings and its (P)B3 foreign-currency senior unsecured medium-term note program rating, as well as the (P)B3 senior unsecured MTN program rating of the Egyptian Financial Co. for Sovereign Taskeek sukuk company.

Before the placement, the outlook was stable.

“The review for downgrade reflects the sovereign's increasing liquidity and debt affordability risks. Slower than anticipated progress with the state-owned asset sale strategy, a key component of the 46-month IMF program that started in December 2022, risks undermining Egypt's financing plans, weakening the sovereign's foreign exchange liquidity and eroding confidence in the currency,” Moody’s said in a press release.

The review will consider the government's ability to finalize the targeted $2 billion in asset sales necessary to meet the IMF program's financing targets for fiscal 2023, ending in June, and prove the viability of the program's external funding strategy that relies substantially on asset sales, the agency said.

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