Fitch changes Egypt outlook to positive

Fitch Ratings said it changed the outlook on Egypt's long-term foreign-currency issuer default rating to positive from stable and affirmed the IDR at B-.

“Near-term external financing risks have markedly reduced due to the Ras El-Hekma deal with the United Arab Emirates (UAE), the move to a flexible exchange rate and the tightening of monetary policy, which also unlocked additional IFI financing and the return of sizeable non-resident inflows to the domestic debt market. The Ras El-Hekma investment underscores the strength of GCC financial support for Egypt, and Fitch has somewhat greater confidence that exchange rate flexibility will be more durable than in the past,” the agency said in a statement.

The $35 billion deal delivered $24 billion in fresh foreign currency in the fiscal year ending in June, Fitch noted. Additionally, the IMF Extended Fund Facility was boosted to $8 billion from $5 billion and the European Union approved a three-year €7.4 billion support package.

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