Egypt's economic outlook has seen a significant shift, with Moody's upgrading the country's credit outlook to positive and affirming its CAA1 rating. This comes as Egypt secures a substantial financial boost, unlocking over $40 billion from the International Monetary Fund (IMF), the United Arab Emirates (UAE), and potentially Saudi Arabia. The IMF's $8 billion loan is contingent upon Egypt implementing reforms, including eliminating competitive advantages for military-owned businesses, despite ongoing concerns about the military-dominated governance under President Sisi. Additionally, Egypt's recent financial maneuvers, such as a major currency devaluation of over 60% and securing a new billion-dollar aid package from the IMF, aim to attract foreign investment by raising interest rates by 6 percentage points, removing currency controls, and floating the currency. These steps have set the stage for a potential comeback of international investors in Egyptian local debt, with the UAE's $35 billion deal expected to cover Egypt's funding gap until June 2026.
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Argentina (lhs) had elections Nov. '23 and devalued Dec. '23. Egypt (middle) had elections Dec. '23 and devalued this week. Turkey (rhs) has elections March 31 and will devalue right after. The worst kind of FX peg is political. Financial markets don't forget this kind of thing. https://t.co/LZ6DBS1MKX
#EgyptWatch🇪🇬: PRES. SISI + IMF LOANS = EGYPT DROWNING IN DEBT. https://t.co/uC4o1Rpqvo
This is Egypt's Pound since 2016: a never-ending cycle of devaluation, followed by a repeg that plants the seed for the next devaluation. Egypt now has the chance to end this cycle by letting the Pound float. Even if scary at first, Egypt will be so much better off medium term... https://t.co/xtPaOWGMUz
Right after Egypt devalued the Pound in Nov. 2016, it repegged the Pound to the Dollar. That repeg created a risk-free carry trade and hedge funds piled into local currency debt (red). Egypt now must avoid a repeat of this. Best way to do that is to let the Pound float freely... https://t.co/vQCx8R7ihu
5 things that happened this week (Egypt special): Big policy moves on 6 March: - Lifting interest rates by 6 percentage points - Floating the currency, leading to a 38% decline on the day (chart) - Agreeing on a loan with the IMF 1/5 https://t.co/aqg0POZhN4 https://t.co/MLtYsHbJ4C
IMF Approves New Billion-Dollar Aid Package for Egypt Following More Than 60% Devaluation of Pound https://t.co/S48Nmd8tWJ
S&P upbeat on Egypt rating after $35 bln UAE deal https://t.co/C63mxMOx7D https://t.co/o6tfFGn2kO
Egypt's bumper cash raise sets stage for foreign investor comeback https://t.co/fCG5q4C9MS https://t.co/eblyDFj1yW
Egypt: Moody's raises outlook - Credit-rating outlook up from 'negative' to 'positive' - Why? Significant external support + currency float - UAE money should cover funding gap until Jun 2026 - Credit rating is still Caa1, 5th lowest https://t.co/OXJ4el2V4R https://t.co/w15eCUw6sg
⚠️ ANALYSIS-EGYPT'S BUMPER CASH RAISE SETS STAGE FOR FOREIGN INVESTOR COMEBACK Full Story → https://t.co/2pzcwbmRQU International investors are dipping their toes back into Egyptian local debt after a much-needed rate hike, a pledge to float the currency and fresh backing… https://t.co/x8RNGXV7W7
Hot money is ready to pour into Egypt: - Hot money: borrows where interest rates are low, to invest where they're high - Egypt was hot-money darling in 2017-21 (blue in chart) - It's re-opening the path now by: raising rates, removing currency controls https://t.co/jc3QKaMiOo https://t.co/oqCFlGY8Yn
In barely 10 days, Egypt has gone from the brink of economic disaster to unlocking more than $40 billion from the UAE and IMF — and Saudi investment could be next https://t.co/s4N6zS5ITv via @MiretteMagdy7 https://t.co/tiNNcAT1jS
As the International Monetary Fund lends $8 billion to Egypt, it insists on "eliminating the competitive advantages enjoyed by Egypt’s military-owned businesses." But it backs -- does nothing to curb -- the military-dominated dictatorship of Pres. Sisi. https://t.co/dlhEBvRDFo
Egypt’s credit outlook was raised to positive by Moody’s as the nation unlocks fresh funding from the IMF and bilateral lenders https://t.co/HGnyi7m9Tg
Moody's changes its outlook on #Egypt to positive and affirms CAA1 rating https://t.co/PX4NESige0