Turbulence in Egypt takes another toll – Moody’s downgrades five banks

Egypt's Political Unrest Has Started to Hurt The Economy

Egypt’s Political Unrest Has Started to Hurt The Economy

In another sign of street protests starting to hit the country’s economy, rating’s agency Moody’s has downgraded five Egyptian banks and has warned that more could follow.

The banks affected by the downgrade are the National Bank of Egypt, Banque Misr , Banque du Caire, Bank of Alexandria and Commercial International Bank.

In a statement Moody’s said it was evaluating if the country can support its banking system amid political unrest and violence. It had already cut Egypt’s debt rating on Monday.

Moody’s had downgraded the country’s rating to Ba2 from Ba1and also lowered the outlook for the country’s economy to negative from stable.

“Moody’s is concerned that, if not resolved quickly, the current period of political uncertainty could negatively impact foreign direct investment flows into the country and disrupt economic activity, thereby weakening the performance of the main economic sector”, Moody’s said in its statement.

According to agency reports, Egypt’s banks will re-open on Sunday after remaining shut for the complete week.

The Deputy Governor of the country’s central bank told Reuters that “The whole banking system will reopen. They will be ready and liquid and everything”.

The Cairo Stock exchange has remained shut on Wednesday – the fourth day in a row and is expected to remain shut on Thursday as well.

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