BY: Maged Mandour

Egypt’s Banking System Is Getting Closer to the Edge

Fitch downgrades ratings of Egyptian banks: National Bank of Egypt, Banque Misr, Banque Du Caire, and Commercial International Bank.

The downgrade results from pressure on banks due to the sovereign debt crisis and constraints on hard currency availability.

Egypt's vulnerability heightened by low foreign currency reserves, limiting government's ability to support banks and meet obligations.

Non-resident holdings of treasury bills pose vulnerability, with potential catastrophic consequences if a mass exodus occurs.

The debt crisis deepens as Sisi's allies demand devaluation and personnel changes, with no financial aid in sight.

Demilitarization of the economy remains elusive, hindering privatization efforts and delaying progress amid the lack of reforms.

The regime's risky strategy relies on international intervention to prevent collapse, despite difficulties in attracting capital inflows.

The regime faces a dual crisis: sovereign debt and banking, with potential catastrophic consequences and limited liquidity access.