Moody's cuts Egypt bonds to Baa3

Moody's Investors Service said it downgraded Egypt's domestic currency long-term government bond rating to Baa3 from Baa1 and has kept the outlook negative.

All other ratings, including the Ba1 foreign currency government bond rating, the Ba1 foreign currency country ceiling for bonds, the Ba2 foreign currency country ceiling for bank deposits and the A3 local currency guideline remain unchanged.

Moody's said its rating action reflects the continued deterioration of Egypt's public finances which prompted the rating agency to assign a negative rating outlook to the domestic currency bond rating in July 2001.

At the same time, Moody's points out that the state of the country's public finances is in stark contrast to the recent positive economic developments associated with the bold reformist stance of the new government and the strengthening of its external position.

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