Egypt’s Sovereign Credit Rating was raised from B- to B by international rating agency Standard and Poor’s (S&P) on Friday. The one notch changed the status of Egypt’s rating from stable to positive. In a report, S&P said Egypt’s long-term rating was lifted to B, and the floatation measure reduced external imbalances and led to higher foreign reserves, adding that inflation has started to moderate. S&P sees that economic and fiscal reforms will underpin rising business confidence and sustain capital inflows, which will lead to an increase in foreign reserves, it assumes. The agency sees that FDI to GDP averaging at 3% per year over the coming period, as it projects it will be the key source of financing for the current account deficit. S&P mentioned that another positive rating action waits in line if Egypt’s growth “significantly outperforms” its forecasts, if unanticipated improvements occur in the current account position and if Egypt's reform programme successfully lowers government debt. On the other hand, it highlighted the downside risks that could put negative pressure on the rating, which included disruption to Egypt’s reform programme by any fiscal slippages, worsening security environment or falling foreign exchange reserves.