S&P Raises Egypt Ratings to B- from CCC+

Standard & Poor’s Ratings has raised its sovereign credit ratings for Egypt to ‘B-/B’ from ‘CCC+/C’, saying it expected the support from other countries which has propped up government finances to continue.

The military-backed government welcomed the move as a first step towards restoring confidence in an economy hammered by political turmoil that has weighed on investment and tourism for nearly three years.

The upgrade in its long and short-term foreign and local currency sovereign credit ratings reflects S&P’s view that authorities have secured sufficient foreign currency funding to manage Egypt’s short-term fiscal and external financing needs.

Gulf Arab states have pledged $12 billion in financial support to Egypt since the army deposed president Mohamed Morsi on July 3 following mass protests against his rule.

“We expect support from bilateral lenders to continue over the medium term as the Egyptian authorities try to address the country’s political and economic challenges,” S&P said in a statement.

The outlook is stable.

The three main international ratings agencies have been cutting Egypt’s credit rating steadily since the Jan. 25, 2011 uprising against Hosni Mubarak.

Finance Minister Ahmed Galal said in a statement this was the first improvement in their assessment since they began coverage of Egypt’s finances in the 1990s.

Source: Reuters