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Egypt was downgraded to B- from B by Fitch. It cites increased external financing risk given high external financing requirements and high debt. They also note that Egypt’s transition to a flexible exchange rate system has been weak. Fitch notes that Egypt is set to see a “significant rise in external debt maturities” to $8.8bn in FY2024 and $9.2bn in FY2025, from $4.3bn in FY2023. The nation’s privatisation plans advised by the IFC are uncertain with “significant execution risk”, they noted. They also believe that the nation’s current account deficit (CAD) is unlikely to continue narrowing since it is difficult to sustain its import contraction. Besides, Egypt is increasingly reliant on FDI to cover its CAD.
Egypt’s dollar bonds however, moved higher with its 5.25% 2025s up 1.2 points to 78.93, yielding 18.9%.