Ratings agency Moody's has kept Egypt’s credit rating at B2 with a stable outlook.
According to a Moody’s report published Saturday, seen by Ahram Online, the credit profile of Egypt (issuer rating B2) is supported by "A3" economic strength.
A3 is the seventh highest rating a debt issuer can receive, denoting that Egypt’s financial and banking system is solid with a low risk of default.
The rating reflects the country's large and diversified economy with robust growth prospects. Yet, Moody’s classified Egypt with B1 for institutions and governance strength balances, adding that they are relatively weak but improving, with important progress on fiscal and economic reforms.
The B1 rating means that the issuer is relatively risky, with a higher than average chance of default.
The company also classified Egypt at CA level for fiscal strength, which reflects weak public finances with a high, albeit declining, government debt burden and weak debt affordability at BA level, which refers to susceptibility to risk, both political risks and persisting security risks in certain areas, as well as banking sector risk, reflecting the relatively large size of the system and the potential for contingent liabilities accruing to the government's balance sheet, mitigated by the sector's stable funding structure, large liquidity buffers and resilient deposit growth performance.
The previous Moody’s credit rating for Egypt was B2 released in September 2019, which was the same rate as April 2019, when Moody’s upgraded Egypt’s credit rating from B3 to B2.
Moody’s said that ongoing fiscal and economic reforms will support gradual but steady improvement in Egypt's fiscal metrics and raise real GDP growth. Yet it said the decision to keep Egypt's credit profile at B2 reflects concerns over weaknesses in Egypt’s credit profile.
Recently, Standard and Poor's kept Egypt’s credit rating in domestic and hard currencies at B level and maintained its stable outlook.
Minister of Finance Mohamed Maait said Saturday that the credit rating reflects the confidence of international institutions and credit rating corporations in Egypt’s ability to deal adequately with the Covid-19 crisis. He added that economic, monetary and fiscal reforms adopted since November 2016, supported by the public, helped strengthen the economy to cope with internal and external shocks and challenges.