S&P downgrades Egypt credit rating
December 25, 2012 02:06
Egypt's long-term credit rating was today downgraded to the junk level by Standard & Poor's which warned it could be lowered further if deepening political turbulence undermines efforts to prop up the economy.
The country's rating was lowered by one level to B-, six steps below investment grade, with a negative outlook, S&P said.
The rating, which is also on par with Pakistan, may face more downgrades should political instability result "in a sharp deterioration of economic indicators such as foreign exchange reserves or the government's deficit," S&P said.
Egypt's benchmark bonds were little changed. S&P has reduced Egypt's rating five times since the start of a popular revolution almost two years ago.
The country's credit risk jumped this month before a constitutional vote that has intensified divisions in the streets.
The unrest led President Mohamed Mursi's government to ask the IMF to delay a decision on a $4.8 billion loan, after getting the initial go-ahead last month.
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