Cairo - Mubasher: Moody’s Investors Service (Moody’s) changed the outlook on Egypt’s long-term issuer ratings to 'positive' from 'stable', following the affirmation of the BS issuer ratings.
The US-based ratings agency affirmed Egypt’s B3 rating which appropriately captures its credit risk profile, Moody’s said in a statement.
Fragile finances by the government will maintain constraining the rating pending further clarity on the sustainability and impact of the reform programme, the statement added.
The North African nation’s international reserves increased on the back of debt-creating inflows, as well as the level of external debt and foreign-currency denominated debt, despite the major recovery in external liquidity position over the past 12 months.
The stable rating outlook indicates that upside and downside risks to the rating are balanced and that the reform progress has been impressive, Moody’s noted.
However, while political stability has improved to some degree, reform momentum may face headwinds, including from the presidential election set to take place by May 2018.
The agency said that despite current challenges “early signs of business environment reforms offer the prospect of a sustainable, inclusive growth path capable of improving competitiveness and absorbing the country’s rapidly expanding labour force.”
The American cooperation said that reform momentum could face some obstacles amid the current slightly stable political scene.