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Friday, December 8, 2023
NewsIn an effort to reduce... Moody's puts Egypt's credit rating under review

In an effort to reduce… Moody’s puts Egypt’s credit rating under review

Egypt faces a severe shortage of foreign currency, despite allowing the pound to devalue sharply in recent months.

Moody’s attributed the decision to place the country’s foreign and local currency issuances under scrutiny in an effort to reduce risks surrounding Egypt’s financing plans.

The agency said slow progress on the asset sale strategy is weakening foreign exchange liquidity in Egypt and undermining confidence in the Egyptian currency.

The sale of assets is an important part of Egypt’s deal with the International Monetary Fund.

A few days ago, Fitch Ratings lowered Egypt’s rating from “B+” to “B” by one notch, while converting its future outlook to negative, pointing to the difficulties of external financing in view of the needs of financing in the country, and the tightening of financing conditions.

At the end of April, the rating agency Standard & Poor’s announced that it had revised its estimate of the degree of the outlook for Egyptian debt from “stable” to “negative” because of the “significant needs for external financing” that it anticipates in terms of public finances. .

Last March, the Central Bank of Egypt’s foreign exchange reserves increased slightly to $34.447 billion, an increase of about $95 million from the previous month, according to what the Central Bank announced on its website in early April.

Foreign exchange reserves in Egypt recorded last February 34.352 billion dollars.

Egypt remains short of foreign currency despite the Egyptian pound falling about 50% since March and its signing of a new $3 billion bailout with the International Monetary Fund in December.

Maait confirms.. “The economy is doing well”

Meanwhile, Egyptian Finance Minister Mohamed Maait confirmed in a speech to the House of Representatives that “the Egyptian economy is doing well and is capable of overcoming the current international challenges”, adding, “Together we will overcome the global crisis that we have overcome previous challenges; we are entering the new fiscal year with an ambitious budget that is more stimulating for growth, production and economic recovery.

Egypt aims to achieve a growth rate of around 4.1% in the next fiscal year, compared to an expected growth rate of 4.2% for the current fiscal year, according to the Egyptian Minister of Planning, Hala Al-Saeed, said today in Parliament.

The Minister of Finance said that the Public Treasury is supporting EGP 127 billion in interest rate difference for the initiative to provide financing to support agricultural, industrial and tourism activities. Support productive sectors.

He said that the government supports carrying out broad structural reforms to push the private sector to lead economic activity, through the government tenders program, which will be implemented under the government’s ownership policy document. the State, noting that £6 billion has been allocated to reduce electricity prices for industrial activities, and £1.5 billion to bear the cost of property tax for the industrial sector.

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Arab Desk
Arab Desk
The Eastern Herald’s Arab Desk validates the stories published under this byline. That includes editorials, news stories, letters to the editor, and multimedia features on easternherald.com.

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