International credit ratings agency Moody's downgraded Egypt's government bond ratings from B2 to B3 on Tuesday.

The downgrade was due to the recent escalation of civil unrest in the country, highlighted by violent clashes between protesters and security forces in recent weeks resulting in many deaths, the agency said in a statement.

The deterioration in the security situation in Egypt pushed President Mohamed Morsi to declare a temporary state of emergency in three Egyptian Suez Canal governorates on 27 January.

The global firm also linked the rating cut to the continuing weakening of Egypt's net international reserves (NIR).

The Central Bank of Egypt announced that the NIR dropped by $1.4 billion in January, the largest decline in a decade, to reach $13.6 billion.

Uncertainty over the $4.8 billion loan from the International Monetary Fund have also pushed the rating down, according to the statement released by Moody’s.

Global agency Fitch cut Egypt’s credit rating from B-plus to B two weeks ago, taking it deep into 'junk' territory, and warned it might cut further if parliamentary elections were delayed.