This came as in response to Fitch's decision to reduce Egypt's sovereign credit rating in local and foreign currencies from "B" to "B-" with a stable long-term outlook
Mohamed Maait, Minister of Finance, confirmed that the Egyptian economy is still capable of providing external financing needs in facing the internal and external challenges resulting from geopolitical tensions.
This came as in response to Fitch's decision to reduce Egypt's sovereign credit rating in local and foreign currencies from "B" to "B-" with a stable long-term outlook. The finance minister said that the government has identified sources for providing external financing needs until the end of the current fiscal year, estimated at $4 billion, with the aim of continuing to diversify international markets.
Maait pointed out that Egypt obtains almost 5 billion dollars annually on flexible terms from multilateral development banks.
Finance minister added that foreign investment flows amounted to $10 billion during the last fiscal year, and it is expected to rise to $12 billion this year with the expansion of the implementation of the IPO program, which aims to increase the private sector’s role and contribution to the Egyptian economy.
In his statement, Maait also reported that the Suez Canal’s revenues which amounted to $10 billion in the last fiscal year with aims to increase it to $12 billion this year.
In its report, Fitch said that it based its decision on heightened risks associated with external financing, macroeconomic stability, and the country's substantial government debt.
Fitch highlighted the contradiction between the stability of Egypt's official exchange rate and the Central Bank of Egypt's intended commitment to a more adaptable exchange rate system. The agency also underscored the anticipated increase in Egypt's external debt maturities and the projected expansion of the current account deficit.
The agency emphasized that Egypt's growing dependence on foreign direct investment (FDI) and the persisting concerns about the trajectory of its debt were additional factors contributing to the downgrade.
