Standard & Poor's today downgraded its sovereign rating on Egypt and warned of the possibility of another lowering, as violent protests demanding the ouster of the president rage through the country crippling the nation and grinding the economy to a virtual standstill.
S&P has become the third international ratings agency to downgrade Egypt in less than a week, due to the unrest in the Arab world's most populous nation.
The target of the demonstrators is the Egyptian president, Hosni Mubarak, who, demonstrators say is completely out of touch with their daily economic plight.
The country's long-term foreign currency sovereign rating stood lowered to BB from BB+, according to S&P. Even though with the cuts the country falls within the investment grade category, however, the downgrade reflects the increasing alarm with which investors are viewing the developments in Egypt.
The rating agency has issued a warning of another downgrade possibly by more than one notch, within the next three months.
According to S&P credit analyst Kai Stukenbrock, the rating actions reflect the agency's expectation that the violent demonstrations of the past week would persist, despite the appointment of a vice president and the dismissal of the government by President Hosni Mubarak.