NEW YORK, Aug 23 (Reuters) - Rating agency Standard & Poor's on Thursday eased off the possibility that it would cut Egypt's sovereign rating soon as the country's political and military leadership move toward working together.
S&P removed Egypt's long-term ratings from CreditWatch, where they had been placed with negative implications earlier this year.
The rating agency also affirmed Egypt's B long-term sovereign credit rating, albeit maintaining the negative outlook.
"We believe that the Muslim Brotherhood -- Egypt's dominant political group -- and the senior ranks of the Egyptian military are moving toward a working arrangement," S&P said in a statement.
"In our view, this could lead to the authorities addressing some of Egypt's pressing structural challenges and stemming the deterioration in government and external finances," the statement added.
But should political or social tensions flare up again, S&P said, Egypt could still see a downgrade.
Moody's Investors Service rates Egypt B2; Fitch rates the country B-plus.