Morocco right-back Achraf Hakimi showing PSG fans his scoring prowess    Egypt's stocks end the week in green as benchmark EGX 30 adds 0.43%    Huawei Technologies has invested $10 mln over 5 years in innovation centres in Egypt    Saudi king expresses hope for the direct talks with Iran    Israeli army detains six Palestinians as raids continue in West Bank    Tensions grow as US, allies deepen Indo-Pacific involvement    Egypt to issue its second dollar bonds today    Genoa, Italy's oldest soccer club, sold to American company    'The future is raising its voice' - A dire mood at the UNGA: AP report    Dubai real-estate firm DAMAC approved to take firm private    President Sisi supportive of strategy to localise automotive industry: PM Madbouly    Vaccine inequity comes into stark focus during UN gathering    Fans fight at French league game in latest stadium violence    Egypt looks forward to resumption of AU-sponsored GERD talks: FM    Egypt electricity minister leads high-level delegation to 65th IAEA General Conference    Dune    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    Qa'a play showing at Lycee El Horreya Theatre, Alexandria is a must go    President Sisi says River Nile lifeline for Egyptians, slams Ethiopia's intransigence in GERD talks    Egypt mourns death of former Defence Minister Mohamed Hussein Tantawy    UAE-based Alameda to invest around $318 mln in Egypt in five years    Egypt to be removed from England's red travel list on September 22    Jordan hosts energy meeting today to discuss transporting Egyptian gas to Lebanon    Russia permits airlines to resume flights from 49 cities to Egypt    Egypt's Abu Soma Development partners with KOMPASS Education    Sisi: coronavirus vaccines in Africa 'far less' than actual needs    Orange Egypt Introduces Amazon Prime Video    Tokyo Olympics: Cautious opening ceremony, shy start for Egyptians in competitions    Mallawi Museum in Upper Egypt holds recycling workshop for children during Eid Al-Adha    Egypt keen on stable tax policies to attract more investors: Finance Minister    Sudan declares state of emergency as water goes beyond Merowe Dam capacity    Niagara Falls illuminated in Egyptian flag to mark 23 July Revolution anniversary    Capital flows into EM keep recovering after March 2020 slump: Central Bank of Egypt    1 child orphaned every 12 seconds due to COVID-19-associated death: World Bank    Egypt, Japanese Olympic Committee discuss boosting sports cooperation    Ethiopia ready to resume dam talks with no legally binding agreements: Ethiopian official    US emphasises AU's role in mediating Ethiopian damdispute    Sunken city of Thônis-Heracleion in Egypt's Abu Qir bay yields new archaeological treasures    New films, concerts, and destinations for Eid Al-Adha holidays    Egypt, Oman discuss enhancing bilateral economic, investment relations    Al Ahly v Kaizer Chiefs: Cairo giants eye 10th CAF Champions League title    Tunisia hopes to have a UN role in resolving Egypt-Ethiopia dam dispute    Egypt denounces Ethiopia's move to start second filling of giant dam    APO Group enters new exclusive agreement with Getty Images on African press releases and images    On International Museum Day, Egypt opens two new museums at Cairo Airport    Egypt's Ahly is establishing a new stadium, expected to be 'sports complex'    Old Cairo's Al-Fustat will be revamped on Egyptian President's directives    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Moody's affirms Egypt's credit rating at B2, stable outlook
Published in Amwal Al Ghad on 01 - 08 - 2021

Moody's maintained on Friday Egypt's long-term foreign and local currency issuance ratings at B2 and its stable outlook.
The credit rating agency also affirmed Egypt's foreign currency senior unsecured ratings at B2, according to its latest report.
Moody's latest assessment of Egypt's issuer ratings was based on continued exposure to volatile financing conditions driven by weak debt affordability and high gross borrowing requirements, balanced against improving shock resilience evidenced during the pandemic as a result of the government's track record of economic and fiscal reform implementation.
Local currency ceiling unchanged, foreign currency ceiling up
Furthermore, the credit agency also left Egypt's local currency ceiling unchanged at Ba2, but raised its foreign currency ceiling to Ba3 compared with B1 previously.
While acknowledging a higher rating for local currency, which is three notches above Egypt's sovereign rating, Moody's took into account the country's bloated public sector.
"The public sector's large footprint in the economy that stifles private sector development and credit allocation is mitigated by the growing implementation of structural competitiveness reforms," the agency's report read.
However, Moody's warned of Egypt's vulnerability to potential liquidity and external financing shocks as a result of the pandemic and volatile external liquidity conditions.
Debt affordability still very poor
Egypt's debt affordability remains "very weak" and susceptible to "a sharp rise" in financing costs, the report added.
"Its external position remains sensitive to bouts of capital outflows. The renewed build-up of foreign exchange reserves provides a buffer against sharp capital flow reversals, but vulnerabilities persist,"
Borrowing requirements the highest
The North African country's exposure to funding shocks is further exacerbated by its high gross borrowing requirements at around 35 per cent of gross domestic product (GDP) for the financial year 2021-2022. Its annual gross borrowing requirements are expected to remain among the highest of Moody's rated sovereigns for the foreseeable future.
For the external side, the structural narrowing in the current account deficit and renewed build-up of foreign exchange reserves to $36 billion at the end of financial year 2021 –after falling to $32 billion in May 2020– provides a buffer against future outflows, potentially related to a resurgence of the pandemic or to tightening international liquidity conditions, Moody's noted.
The rating agency expects Egypt's foreign exchange reserve buffer to remain sufficient to fully cover annual external debt service requirements accruing over the upcoming three years.
Egypt's flexible response to pandemic shocks
"The government's flexible crisis response has sustained growth during the pandemic despite the sharp contraction in the tourism industry which accounted for about 10 percent of GDP in 2019, supported by continued public investment and strong remittance inflows,"
Looking forward, Moody's projected Egypt's debt to GDP ratio to fall to 84 percent by 2024 due to the continued primary surpluses and the tendency to return to economic trend growth of 5.5 percent starting financial year 2021/2022.
Social risks
"Relatively high poverty rates and gender inequality also contribute to social risks which have been exacerbated by the large economic reform adjustment costs borne by consumers over the past few years. As part of the government's reform effort, social risks are being mitigated by a more targeted social safety net, although the breadth of coverage remains relatively narrow," Moody's added.

Clic here to read the story from its source.