Fitch Affirms Egypt's Rating at 'B' with Stable Outlook

Fitch Ratings announced the affirmation of Egypt's long-term foreign-currency issuer default rating at 'B' with a stable outlook, attributing the decision to expected growth, support from international partners, and the size of the Egyptian economy compared to similarly rated peers.

The agency stated that Egypt's foreign reserves rose by about $5.5 billion over eight months to approach $54.4 billion, while the net foreign assets of the Central Bank of Egypt reached around $19 billion in August.

On the other hand, Fitch noted portfolio investment outflows of more than six billion dollars and a depreciation of the Egyptian pound by over 14%. The agency expects Egypt's GDP growth to reach 5.1% in 2026.

This decision concerns investors and borrowers in Egypt and the region, as credit ratings determine borrowing costs from global markets and the attractiveness of the local market to foreign capital, with any change reflecting on the cost of project financing and sovereign loans.

What Do These Terms Mean?

Credit Rating: An assessment issued by a specialized agency on the ability of a country or company to repay its debt on time; the higher the rating, the lower the borrowing cost.

Outlook: The agency's expectation for the direction of the rating in the coming period; a stable outlook indicates that the rating is likely to remain unchanged.

Net Foreign Assets: The difference between the Central Bank's holdings of foreign currency assets and its liabilities in them, measuring its ability to support the local currency.

Foreign Reserves: Hard currency assets held by the central bank to cover imports, defend the exchange rate, and service foreign debt.