Egypt debt rating downgraded by Moody's

1/31/2011

Ratings agency Moody's has cut its debt rating for Egypt, and changed its outlook from stable to negative.

Moody's said the cut was "prompted by the recent significant rise in political event risk and concern that the policy response could undermine Egypt's already weak public finances".
It has downgraded the country's debt rating one notch from Ba1 to Ba2.
Thousands of Egyptian protesters have taken to the streets, calling for President Hosni Mubarak to step down.
On Friday, Fitch also downgraded its outlook on Egypt from stable to negative, citing the political unrest.
"Finally the rating agencies wake up. Egypt rated flat with Turkey was always a joke," said RBS analyst Timothy Ash.
Rising concerns The anti-government protests have been largely driven by public anger at rising prices, unemployment, and accusations of corruption and lack of democracy.
The Moody's downgrade reflects growing unease among ratings agencies at the impact of political tensions across parts of North Africa and the Middle East.
The unrest in Egypt follows the uprising in Tunisia, which ousted President Zine al-Abidine Ben Ali.
Last week, Standard & Poor's also named Algeria and Jordan as being vulnerable to unrest similar to that seen in Tunisia, saying the political uncertainty weighed on their sovereign ratings.
Concerns that the unrest in Egypt could spread also knocked European stock markets, with shares in airlines and travel operators taking a hit.
The Cairo Stock Exchange itself was closed for the third straight day.