Ratings agency Standard and Poor’s (S&P) has given the Egyptian economy a vote of confidence, upping its long-term sovereign credit ratings by one notch to B- (stable outlook). But the key reason is an inflow of Gulf cash, rather than improved fundamentals. And Egypt’s debt remains junk grade. S&P’s on 15 November upgraded Egypt’s long- and short-term foreign and local currency sovereign credit ratings to B-/B from CCC+/C.

The upgrade reflects “our view that the Egyptian authorities have secured sufficient foreign currency funding to manage Egypt’s short-term fiscal and external financing needs… [we] expect support from bilateral lenders to continue over the medium-term as the Egyptian authorities try to address the country’s political and economic challenges,” S&P says. (CONTINUED - 390 WORDS)