Capital Intelligence: Egypts ratings rises
Egypt, Economics, 10/22/2005

Capital Intelligence, the international emerging markets rating agency, today said that it has affirmed Egypt's BB+B long- and short-term foreign currency ratings and its BBB/A3 long- and-short term local currency ratings. The outlook remains stable.

Egypt's ratings are supported by improving international liquidity and a manageable external debt burden. The current account position registered a fourth consecutive surplus in the fiscal year that ended in June 2005 and contributed to a large surplus in the overall balance of payments.

The increase in foreign currency inflows enabled the Central Bank of Egypt to add about $ US 4 billion to its foreign exchange reserves, which reached $ US 17.6 billion by the end of June.

"The current account is expected to remain in surplus over the coming years, underpinned by a competitive exchange rate, high oil prices, rising volumes of liquefied natural gas, and increased tourism flows following an expected lull induced by the recent Sharm el Sheikh bombings," Capital Intelligence said.

Official reserve coverage of total external debt falling due within a
year is relatively high at an estimated 35.9 per cent in June 2005 and is projected to remain at comfortable levels in fiscal 2006 and fiscal 2007 despite the maturing of a US $ 500mn Eurobond in July 2006.

A healthy level of official reserves, recent foreign exchange market reforms, and the application of a more flexible exchange rate regime suggest that Egypt would be able to weather most types of external shock.

Previous Stories:
  Egypt attracting more foreign investments because of its reform   (10/20/2005)
  Egypt surplus of $ 4.5 billion in balance of payment   (10/20/2005)
  $1.7 billion Egyptian exports to Arab states and COMESA   (10/17/2005)

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