Egypt's credit profile reflects diversified economy, resilience to financing shocks: Moody's

CAIRO, Sept. 2 (Xinhua) -- Egypt's (B2 stable) credit profile reflects its sizable and diversified economy and resilience to financing shocks, said Moody's Investors Service in a report on Wednesday.

"Relatively low levels of foreign currency-denominated and external government debt also support Egypt's credit profile," said the report of the global credit rating institution.

It added that declining inflation and credible monetary policies have also allowed the Central Bank of Egypt (CBE) to cut interest rates, "which has contributed toward the gradual decline of governmental domestic borrowing costs."

Egypt's foreign currency reserves stood at 38.3 billion U.S. dollars by the end of July, according to the CBE.

Moody's said that Egypt's foreign exchange reserves are enough to cover maturing external liabilities over the next three years.

The report noted that Egypt's main credit weakness is its large government financing need of 30-40 percent of GDP annually.

Elisa Parisi-Capone, vice president and senior analyst at Moody's, said that Egypt's stable credit outlook reflects the resilience of the country's credit profile against financing shocks despite high exposure. "This is driven by its effective and credible government policies."

She advised that "a lengthening track record of credible and effective fiscal, economic and debt management would also reflect positively on Egypt's credit profile."

Moody's report came a day after the CBE said that Egypt paid off 6.8 billion dollars in debt during the first quarter of 2020.

Egypt's foreign debts stood at 111.29 billion dollars by the end of March, according to the CBE.

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