CAIRO: Ratings agency Standard & Poor’s on Thursday pushed Egypt’s sovereign credit ratings deeper into junk status, citing the country’s dire political and economic situation and the increased risk of civil strife.
The cut is the latest blow to Egypt, whose economy is reeling from nine months of protests and strikes since the mid-February ouster of former president Hosni Mubarak. Last month, Moody’s Investors Service also cut its ratings for Egypt, citing the ongoing political challenges and the weak economy.
S&P said it cut Egypt’s long-term foreign and local currency sovereign ratings to B+ from BB-, with a negative outlook.
"The downgrade reflects our opinion that Egypt’s weak political and economic profile … has deteriorated further," the agency said in a statement.
In addition to the current wave of protests against the ruling military council, it cited the erosion of the country’s net international reserves and the risk of further unrest stemming from rising expectations.
"These challenges could arise if populist demands for greater political participation are thwarted, or from demands for improved living standards from different sectors of the population no matter who is governing Egypt," the agency said.