International credit rating agency Fitch IBCA has given the Egyptian economy a negative assessment, stating tensions in the economic policy framework as its main concern. Fitch asserted that Egypt's efforts to manage the exchange rate and interest rates would not help its economic recovery, reported Xinhua news agency.
The Central Bank of Egypt (CBE) responded in a statement affirming Egypt’s commitment to repaying its foreign debt on time. Egypt’s managed-peg exchange system is "flexible enough to reflect the market forces," CBE added.
Egypt’s major sources of forex earnings—labor remittances, Suez Canal revenues, tourism and oil—were adversely affected by the global downturn following the September 11 attacks.
Fitch also expressed concern that national Gross domestic product (GDP) may come in lower than official four percent estimates, and that the general government deficit may widen to approximately three percent of GDP, according to Prime Securities.
Fitch affirmed Egypt's current long-term domestic currency rating at BBB+, the short-term foreign currency rating at BBB- and the long-term foreign currency rating at F3. — (menareport.com)
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