Ahmad 
“Fitch” Ratings has revised its outlook for Egypt’s sovereign rating from “stable” to “positive”.
In a recent report, the agency revealed that its decision came against the backdrop of “significantly reduced near-term external financing risks” due to the Ras Al Hikma deal with the UAE, the transition to a flexible exchange rate policy, and the tightening of monetary policy.
Additional financing from international financial institutions for Egypt and the return of non-resident inflows into the domestic debt market have helped.
The Central Bank of Egypt’s decision to increase interest rates by 600 basis points on March 6 indicates the Egyptian authorities’ seriousness in addressing economic challenges.
The investment in Ras El Hikma underscores the strength of the financial support provided by the GCC countries to Egypt and is confident that exchange rate flexibility will be more sustainable than in the past.
Fitch expects inflation to remain around 30% until the end of 2024, which will keep real interest rates in Egypt close to positive levels.
Egypt has seen a state of improvement after it signed an agreement with the UAE in February under which the holding will acquire the rights to develop the Ras El Hikma project for $ 24 billion with the aim of developing the region, in addition to converting $ 11 billion of the UAE’s deposits with the Central Bank of Egypt into investments in major projects, and Egypt’s treasury has already received $ 10 billion of UAE funds.
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