Moody’s upgraded Egypt’s long-term sovereign rating by one notch on Friday 16 October, from Caa1 to B3, while maintaining a positive outlook. The rating agency highlights the budget consolidation efforts and economic reforms undertaken by Cairo, according to the elements of its decision reported by Reuters.
The new rating keeps Egypt in the speculative category. On Moody’s scale, bonds rated B carry a high credit risk, while the Caa category corresponds to a very high risk. The upgrade therefore improves the assessment of the country’s creditworthiness without moving it into the category of the best-rated borrowers.
According to the agency, the shift to a more flexible exchange rate and the tightening of monetary policy have strengthened external reserves and the economy’s capacity to absorb shocks. The positive outlook rests on the possibility of a faster reduction in debt and interest charges than in its baseline scenario.
In a statement published on Saturday, the Egyptian Finance Ministry welcomed the decision, while acknowledging the difficulties linked to the level of debt service. It says it is working to accelerate the reduction and puts government debt at 81.9% of gross domestic product in June 2026.
The ministry also said net international reserves reached 57 billion dollars in September.