Summary and Translation to English:

Bonds and the black market US dollar in Egypt are fluctuating after a credit rating downgrade.

Investing.com - Sovereign dollar bonds in Egypt declined on Friday after credit rating agency Moody's downgraded its rating to a higher-risk zone.

At the same time, the black market exchange rate of the US dollar in Egypt has been rising due to significant economic news this week.

Moody's downgraded Egypt by one notch to Caa1 from B3, which is the seventh-highest level of high-risk rating, citing the country's deteriorating ability to handle debt.

Egyptian Bonds Decline:

Data from Tradeweb showed that all Egyptian sovereign dollar bonds declined, with the 2027 maturity falling by about 3 cents before dropping to a loss of 0.60 cents. Most bonds are trading at their lowest levels since May, according to Reuters.

In response to Moody's downgrade, Egyptian Finance Minister Mohamed Maait stated that the government is implementing structural reforms to address economic challenges and stimulate investment and the private sector.

He added that Egypt reduced spending in the fiscal year ending in June despite external shocks, including indirect effects of the war in Ukraine.

Concerns About Funding Gap:

Egypt devalued its currency by half during the year ending in March. However, the Managing Director of the International Monetary Fund, Kristalina Georgieva, stated in an interview with Bloomberg on Thursday that Egypt will continue to "drain" its reserves unless the pound is devalued again.

Last October, the IMF approved a $3 billion rescue package for Egypt.

Georgieva explained that constructive discussions are taking place with Egypt, and more cooperation between the IMF team and the Egyptian government is expected in the coming weeks.

At least two Egyptian banks suspended the use of pound-denominated debit cards abroad this week to halt the draining of foreign currency, and other banks are expected to follow suit.