Fitch cuts Egypt rating

CNC report from New York
Added On July 7, 2013

Fitch Ratings has downgraded Egypt's credit rating by a notch on concerns that the ouster of the civilian government will damage the national economy.

The ratings firm on Friday lowered Egypt's long-term foreign issuer default rating to B-minus from B, six steps into junk territory.

The outlook on the country is negative, meaning further downgrades are possible.

The downgrade comes after the country's military ousted the President Mohammed Morsi and suspended the Islamist-drafted constitution on Wednesday.

Fitch says Egypt's political situation could become even more unstable.

And believes the heightened uncertainty and inflamed tensions will hurt the country's economy and its creditworthiness.

Fitch says the political environment will make it harder for the country to implement fiscal reforms that are needed to secure International Monetary Fund assistance.

And adds the crisis is likely to set back the country's economic recovery and could worsen already deteriorated fiscal outcomes.