Fitch downgrades Egypt

Fitch Ratings said it downgraded the Arab Republic of Egypt's long-term foreign-currency issuer default rating to BB- from BB and long-term local-currency issuer default rating to BB from BB+.

The outlook is negative.

The short-term foreign currency issuer default rating was affirmed at B.

"The downgrade and negative outlook reflect the substantial and continuous erosion of Egypt's international reserves in 2011, which accelerated in October/November," Richard Fox, head of Middle East and Africa sovereigns at Fitch, said in a statement.

"Ongoing political turbulence is also delaying economic recovery and has contributed to worsened debt dynamics."

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