Arab financial markets are being rocked by Egypt’s political turmoil, with several stock markets continuing to drop and the cost of insuring against default spiking across the region.
While Egypt’s stock market remains closed after shedding over a fifth of its value in January, credit default swaps – a kind of default insurance – on Egyptian debt rose 17 basis points to 445 basis points on Monday, according to Markit, a data provider.
Moody’s on Monday downgraded Egypt’s debt rating one notch to Ba2, with a negative outlook, citing worries that “escalating political tensions” will worsen the government’s already stretched financial position
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