Moody's Lowers Egypt's Credit Rating

3/16/2011

(RTTNews) - Moody's Investors Service on Wednesday downgraded Egypt's foreign and local currency government bond ratings by one notch to Ba3 from Ba2, citing continued volatility in the country's domestic politics.
This is the second rating downgrade this year following a cut to Ba2 from Ba1 on January 31.
The rating agency said the prospect for Egypt's economic recovery is uncertain and the political uncertainty is having an adverse impact on the country's fiscal position and broader economic performance.
The negative outlook on the rating is maintained given the uncertainty of the political outlook and the resulting downside risks to the country's credit fundamentals.
The rating agency warned that it would consider downgrading Egypt's bond ratings further in the event of a substantial fall in foreign exchange reserves, signs that the government were facing difficulty in funding its wide fiscal deficit, or a political deterioration that threatened the transition to an effective government.