Egypt’s Status as Emerging Market Safe, For Now

Any immediate concern about Egypt’s status as an emerging market was put to rest by MSCI in its annual market classification review: it didn’t mention the cash-strapped Arab country.

Investors were worried the index compiler could potentially put the country on watch for a potential downgrade due to its foreign-exchange woes.

Egypt used up more than half of its international reserves since early 2011 as investments and tourist inflows fell sharply amid political unrest, though aid from its Arab Gulf neighbors has helped in recent months.

To ease the FX pressure, the country imposed certain limitations on repatriations but that’s acting as a deterrent for foreign investors, analysts say.