RIYADH: Egypt’s economic conditions are expected to improve during the coming period, following Gulf support, currency devaluation and rise in interest rates, a director at Fitch Ratings told Asharq.
Gulf Arab states are transferring up to $22 billion to Egypt as they help the country to overcome the currency crisis, according to Reuters.
Last month, Saudi Arabia had deposited $5 billion in Egypt’s central bank, alongside additional investments, in an effort to shore up the economy.
Fitch director Krisjanis Krustins has praised Egypt’s performance in achieving fiscal discipline and keeping the fiscal deficit under control.
Despite a large current account deficit, the north African country’s performance in the second quarter of the 2021/22 was good, he added.
In an earlier report, the credit rating agency suggested a rise in Egypt’s interest rates by 300 basis points by the 2023-2024 fiscal year, in a bid to maintain the attractiveness of assets in the local currency, according to Asharq.
Fitch has maintained the long-term credit rating of Egypt's foreign currency issuer at B+, with a stable outlook.
Inflation rates are likely to exceed 10 percent during the current fiscal year, increasing to 12 percent during the next fiscal year, Krustins said, stressing that this will push the Central Bank of Egypt to raise interest rates further.
