Egypt’s long-term credit rating has been downgraded to the junk level by Standard & Poor’s which warned it could be lowered further if deepening political turbulence undermines efforts to prop up the economy.

The country’s rating was lowered by one level to B—, six steps below investment grade, with a negative outlook, S&P said on Monday.

The rating, which is also on par with Pakistan, may face more downgrades should political instability result “in a sharp deterioration of economic indicators such as foreign exchange reserves or the government’s deficit,” S&P said.

Egypt’s benchmark bonds were little changed. S&P has reduced Egypt’s rating five times since the start of a popular revolution almost two years ago.

The country’s credit risk jumped this month before a constitutional vote that has intensified divisions in the streets.

The unrest led President Mohamed Mursi’s government to ask the IMF to delay a decision on a $4.8 billion loan, after getting the initial go-ahead last month.

“The increased polarisation between the Muslim Brotherhood’s Freedom and Justice Party and sections of the population is likely to weaken the sovereign’s ability to deliver sustainable public finances, promote balanced growth and respond to further economic or political shocks,” S&P said.

The cost of protecting Egypt’s debt against default for five years using credit default swaps surged 99 basis points this month to 490, according to CMA, which is owned by McGraw-Hill Cos (MHP) and compiles prices quoted by dealers in the privately negotiated market.

That ranks it among the world’s 10 riskiest borrowers, ahead of Iraq and Lebanon.

The rating cut “should serve as an alarm for politicians from both sides that we need stability and clarity for the economy in order for Egypt to move on,” Khalil El Bawab, director of Egypt fixed income at EFG-Hermes Holding SAE, said by phone.

Still, investors often ignore such rating actions.

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