S&P Global Ratings has downgraded Egypt’s long-term foreign and local currency sovereign credit ratings to “B-“ from “B”, with a stable outlook, according to a statement on October 20th.

The downgrade was due to the recurring delays to the execution of monetary and structural reforms in the North African country, which made the currency market unstable and negatively affected the net foreign asset position of systemic banks.

The rating agency also confirmed its short-term sovereign credit ratings at ‘B’.

Moreover, it expects an adjustment to the exchange rate via a further devaluation of the Egyptian pound to around its level in the parallel market of about EGP 40 per US dollar, which will pave the way for the Central Bank of Egypt (CBE) to allow the EGP to be more responsive to external shocks.

“Inflationary pressures are likely to remain high as we expect further exchange-rate weakness,” as per the statement.

S&P Global also forecasts the Egyptian economic growth to reach an average of 4% over the next three years.

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