Egypt’s bonds decrease rapid after Moody’s downgrade over economic woes

The Egyptian sovereign dollar bonds have tumbled after Moody, a global integrated risk assessment firm downgraded the country’s credit rating deeper into junk territory, ramping up the pressure on the cash-strapped nation.

The country is in the pangs of a bruising economic crisis, with record inflation, crushing government debt and a plunging currency that has driven more of its citizens to seek risky routes out of the country.

The economic situation in the country remains dire, as Egypt’s currency has lost half its value since March 2022, and as inflation reached an all-time high of 39.7 percent in August.

Speaking to Bloomberg on Thursday, the Director of the International Monetary Fund (IMF) Kristalina Georgievia said that Egypt will continue to bleed her reserves unless it devalues again.

She added that there have been constructive engagements with the Egyptian government and more systematic work between the IMF team and the government is expected in coming weeks.

Meanwhile, at least two Egyptian banks this week suspended the use of Egyptian pound debit cards outside the country to stop a drain on foreign currency.

Banks in recent months have also been tightening up on the amount of foreign currency clients can buy in Egypt and on how much they can charge to their credit cards while abroad.