Fitch Ratings has upgraded its outlooks for 4 Egyptian banks’ long-term debt, raising it to positive from stable, reflecting the agency’s growing confidence on the back of the country’s improvements to its foreign currency reserves and FX stability.

The ratings agency updated its outlook for the National Bank of Egypt, Banque Misr, Banque du Caire, and the Commercial International Bank (CIB) to positive while maintaining their respective ratings at “B-”.

“Banks' performance will remain strong in the medium term supported by high interest rates, stronger business growth and greater macroeconomic stability,” explained Fitch in a statement.

Fitch also pointed towards improved FX liquidity, accelerated by the Ras El Hekma deal and International Monetary Fund’s (IMF) Extended Facility Fund, as well as greater foreign exchange rate flexibility.

These will support greater macro stability in FY2024/2025 says Fitch, noting that “alongside with a stronger sovereign credit profile will be positive for banks' business, risk and financial profiles”.

Fitch Ratings upgraded Egypt’s sovereign outlook to positive earlier in May, citing declining near-term external financing risks attributed to the influx of foreign currency from the Ras El Hekma deal and IMF, the pound’s float, and interest rate hikes.

Fitch previously lowered the banks’ credit ratings from B to B- back in November 2023, following a downgrade of Egypt’s sovereign rating.

Back in March, Moody’s upgraded its credit rating outlook for 5 Egyptian banks to positive from negative, affirming its Caa1 long-term deposit rating.