Saudi Arabia’s recent pledge of $20b worth of petroleum products to Egypt over the coming five years, in addition to China’s pledge of $1.7b in loans to Egypt’s Central Bank (CBE) and The National Bank of Egypt (NBE), are considered as a credit positive for the country. Both countries’ support will ease the recent budget pressures, the international credit agency, Moody’s, said in a statement, reported Ahram Online.
According to Moody’s, low oil prices hit Egypt’s exports which fell to $21.9b from $26.1b, while Suez Canal revenues fell on the back of weak global growth. The statement also highlighted the negative effect recent events took on the tourism sector, negatively affecting the country’s balance of payments.
Other factors that are aiding Egypt’s position are the $1b loan the country received from the World Bank, as part of a $3b package over 3 years. Although these loans raise Egypt’s external obligations, high levels of total external debt mitigate possible resulting risks.