Cairo – Mubasher: Moody's Ratings has affirmed all ratings and assessments of five major Egyptian banks, changing the outlook of their long-term deposit ratings from negative to positive.
The rating agency affirmed the Caa1 long-term deposit ratings of the National Bank of Egypt SAE (NBE), Banque Misr, Banque du Caire, and Commercial International Bank (CIB), according to a press release.
Moody’s also affirmed the B3 long-term deposit ratings of the Bank of Alexandria (BoA).
On 7 March, the rating agency affirmed Egypt's Caa1 rating and changed its outlook from negative to positive.
“The change in outlook to positive reflects the very large foreign direct investment contribution by the UAE, and the marked change in economic policy with a large devaluation of the currency and increase in interest rates that, if maintained, will help Egypt maintain an upsized IMF program,” Moody’s said.
“The large devaluation of the currency and increase in interest rates will likely help Egypt maintain an upsized IMF program, reduce the risk of a renewed build-up of external imbalances and strengthen the economy's shock resilience over time,” the rating agency stated.
Furthermore, Moody’s expects recent economic developments in Egypt to positively impact the banking sector, particularly given the high sovereign exposure of the five banks whose ratings have recently been affirmed.
This exposure is especially notable in the form of government debt securities, which closely tie their credit profiles to the government's.
Earlier in March, Egypt reached a final deal with the IMF for a $8 billion financing package.
In a special monetary policy meeting earlier today, the Central Bank of Egypt (CBE) announced a 6% increase in interest rates.
The official exchange rate between the US dollar and the Egyptian pound reached a historic high, surpassing EGP 50.
