July 5, 2013 / 5:26 PM / 4 years ago

UPDATE 1-Fitch cuts Egypt to B-minus on political worries

NEW YORK, July 5 (Reuters) - Fitch Ratings downgraded Egypt’s credit rating on Friday, citing the political turmoil this week that has toppled the country’s first freely elected president.

The credit ratings agency cut Egypt’s long-term foreign and local currency issuer default ratings to B-minus from B. The outlooks are negative, meaning Fitch could cut again in the coming months.

“There is a risk of a material deterioration of domestic political stability, with downside risks for economic outcomes and creditworthiness,” Fitch said in a statement.

“There is high uncertainty over how the risks resulting from the military coup evolve over the short term and the eventual pathway to a peaceful political transition,” it added.

Egyptian President Mohamed Mursi was toppled on Wednesday in what his Islamist supporters have called a military coup d‘etat.

Widespread confusion has followed, with at least three protesters shot dead on Friday outside the Republican Guard barracks in Cairo where Mursi is being held. Angry Islamist supporters confronted troops across the country.

Moody’s Investors Service rates the country Caa1 with a negative outlook. Standard & Poor’s rates Egypt at CCC-plus with a stable outlook.

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