Moody's turns Egypt outlook to negative

Moody's Investors Service said it changed the government of Egypt’s outlook to negative from stable and affirmed the long-term foreign- and local-currency issuer ratings at B2. Moody's also affirmed Egypt's foreign-currency senior unsecured ratings at B2, and its foreign-currency senior unsecured medium-term note program rating at (P)B2.

“The negative outlook reflects the rising downside risks to the sovereign's external shock absorption capacity in light of a significant narrowing in the foreign-exchange reserve buffer to meet upcoming external debt-service payments.

“While the economy's external position remains supported by significant financial commitments pledged by Gulf Cooperation Council (GCC) oil-exporting sovereigns and the prospect of a new IMF program, tightening global financing conditions increase the risk of weaker recurrent inflows than Moody's currently anticipates to shore up Egypt's external position,” the agency said in a press release.

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