Fitch revises Egypt’s outlook to positive on reduced external financing risks

EGYPT-RATINGS/FITCH (UPDATE 1):UPDATE 1-

Reuters
Published4 May 2024, 03:48 AM IST
Fitch revises Egypt's outlook to positive on reduced external financing risks
Fitch revises Egypt’s outlook to positive on reduced external financing risks

(Adds background throughout, Adds Fitch's comment in paragraph 9)

May 3 (Reuters) - Global ratings agency Fitch revised Egypt's outlook to positive from stable on Friday.

The agency affirmed Eygpt's rating at 'B-', citing reduced external financing risks and stronger foreign direct investment.

In March, the International Monetary Fund

approved

an expanded financial support of $8 billion for the North African country.

The IMF's loan programme with Egypt should help the country gradually reduce its debt burden, an IMF official

said

last month. In February, the country also secured a $35 billion real estate investment from the United Arab Emirates to develop its Mediterranean coast stretch.

Foreign investors have poured billions of dollars into Egyptian treasury bills since the country announced the IMF loan programme. After the investment in the country's foreign portfolio and the support from UAE, Egypt's net foreign assets deficit shrank by $17.8 billion in March.

Fitch says that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.

The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter, its foreign debt climbed by $3.5 billion to $168.0 billion.

"Exchange rate flexibility will be more durable partly reflects its close monitoring under Egypt's IMF EFF, which runs to late 2026," said Fitch in a statement.

Moody's revised its outlook on Egypt to "positive" in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.

(Reporting by Sruthi Narasimha Chari & Anandita Mehrotra in Bengaluru; Editing by Tasim Zahid)

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First Published:4 May 2024, 03:48 AM IST
HomeNewsFitch revises Egypt’s outlook to positive on reduced external financing risks

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