The offer was supposed to raise 6bn Egyptian pounds ($969m) through 2bn pounds worth of six month bills and 4bn pounds worth of one year bills, and its cancellation sent the Egyptian pound tumbling to its lowest value since 2004. Add in the a recent ratings downgrade, and it’s a tough December for Egypt.
The downgrade of Egyptian government debt by Standard and Poor’s on 24 December was from B to B-, six ratings below the BBB- investment grade. The downgrade comes amid continued political instability as the Muslim Brotherhood government led by Mohamed Morsi attempts to push through a new constitution in the face of opposition from secular parties. In a statement S&P said: