Live: The American bank, Morgan Stanley, announced that it has revised its future outlook on Egypt’s debts to a negative outlook after shifting to a “non-favorable” position from “neutral”, due to the increase in the amount of risks it faces with regard to credit in the near term.
In its report issued and published by Bloomberg, the bank attributed the pessimistic change in its view of Egypt to the lack of a positive stimulus for two reasons: the first is the approaching election date at the end of this year; This reduces the possibility of reforms related to the flexibility of the pound’s exchange rate against foreign currencies as required by the International Monetary Fund.
The second reason, according to the bank, is the continued burden of Egypt’s credit rating risks on the part of Moody’s, which is scheduled to make its decision by next November after it postponed the decision to consider the downgrade last August.
Moody’s initial downgrade review, which began on May 9, 2023, was driven by a lack of progress in achieving the government’s $2 billion asset sales target for the 2022-2023 fiscal year, and rising debt sustainability risks amid rising borrowing costs and a weak currency, according to the bank. .
The agency attributed the extension of the credit rating review period to August 10, 2023, to the fact that it needs more time to evaluate how the asset sales carried out by the government, until that time, will lead to an increase in liquidity reserves in light of the net foreign asset position.
While the extension period gave Egypt some relief; The country’s net foreign assets have not improved significantly as demand for imports continues and asset sales improve modestly, according to the bank.
The long-term impact on credit remains high financing needs this year and into next year, especially at a time when market access remains uncertain for B-rated credits such as Egypt.
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2023-10-03 17:11:22
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