Page 31 - issue 66 en
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ELITE
ELITE
On the 1st of November 2024, Fitch The new foreign investments,
Ratings announced that it has particularly from Ras El Hekma, along
upgraded Egypt’s long-term foreign- with non-resident investments, have
currency Issuer Default Rating (IDR) been key in improving Egypt’s external
from B- to B, with a stable outlook for finances, in addition to paving the way
the first time since 2019, indicating the for the adoption of more flexible
country’s strong finances on the back exchange rate and monetary policies,
of foreign investments, and tighter specially under the IMF monitoring
monetary conditions programme, that ensures that there is no
FX intervention by the Central Bank of
This upgrade reflects several key rating Egypt, and proves to be more durable
drivers, including lower external risks and sustainable than in the past.
and policy adjustments, replenished
external buffers, new capital inflows, Another key driver of this upgrade is the
more flexible exchange rates, falling downward trend of inflation that started
inflation and reduced debt burden, to drop in September to 26.4% from a
initial steps to contain fiscal risks, high 35.7% in February, which is expected
geopolitical risks, and high but falling to continue falling, reaching 12.5% and
public debt levels. 10.6% by the end of the fiscal year 2025
and 2026 respectively. This downward
One of the key rating drivers of this trend is mainly supported by the
upgrade is the “Lower External Risk and expectations of a recovering economy
Policy Adjustments”. and broad currency stability.
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