(Central News Agency reporter Shi Wanqing's special report from Cairo on the 25th) The Egyptian pound continues to weaken, with the exchange rate falling below 55 Egyptian pounds against the US dollar on the 22nd, setting another record low. The president of the Egyptian Central Bank emphasized that it is normal for the exchange rate to fluctuate with the economic environment and called on the public not to panic excessively; however, Egyptian media analyzed that regional geopolitical tensions, rising energy import costs and foreign debt repayment pressures are causing the Egyptian pound to face a new wave of depreciation pressure.
The Egyptian media "Al Ahram" reported that the selling prices of major banks such as the National Bank of Egypt (NBE), Banque Misr, and Banque du Caire all exceeded 55 Egyptian pounds on the 22nd, and the selling price of Al Baraka Bank reached 55.37 Egyptian pounds.
The report quoted Egyptian Central Bank President Hassan Abdalla's public remarks as saying that the exchange rate should adjust with changes in the surrounding environment and economic situation, so the central bank will continue to implement a flexible exchange rate policy.
Abdullah emphasized that if the external environment has changed but the exchange rate remains unchanged, it will be more worrying. He also called on the public not to panic excessively due to exchange rate fluctuations.
"Al-Ahram" pointed out that the adoption of a floating exchange rate to maintain exchange rate flexibility is also an important commitment of Egypt to the International Monetary Fund (IMF)'s $8 billion extended fund loan program.
Egypt has adjusted its exchange rate several times since it promoted IMF-supported economic reforms at the end of 2022. At the beginning of 2023, the Egyptian pound had depreciated significantly; in March 2024, the exchange rate system was further adjusted from a fixed exchange rate to a floating exchange rate.
However, exchange rate liberalization does not mean that the Egyptian pound will not continue to withstand external shocks. Egyptian media Al Manassa reported on the 22nd that in the past few days, foreign investors withdrew approximately US$2 billion from the bond secondary market of the Egyptian Stock Exchange, reflecting that some investors have increased concerns about the regional situation and the global financial environment.
The IMF pointed out in its August report that Egypt's public debt and overall financing needs remain high. If regional conflicts escalate again, it may trigger capital outflows, push up borrowing costs, and weaken foreign exchange earnings.
Al Manassa quoted Esraa Ahmed, general economic analyst at Thndr Securities, as saying that the withdrawal of foreign investment and rising energy import costs are the main factors that have put pressure on the Egyptian pound recently. The potential expansion of regional conflicts, coupled with rising tensions between Saudi Arabia and the Yemeni Youth Movement (Houthi), have made investors more cautious.
In addition, the recent rise in global energy prices has further boosted Egypt's demand for U.S. dollars. Egypt is one of the countries with large demand for energy imports. Rising international oil prices will increase oil and natural gas import expenditures, thereby increasing the foreign exchange burden.
Al Manassa also reported that rising U.S. government bond yields and market expectations that the U.S. Federal Reserve may further raise interest rates may prompt some foreign capital to shift to U.S. dollar assets and reduce investment in emerging market bonds.
Egypt is currently under huge foreign debt pressure, coupled with the increased demand for U.S. dollars from importers. Once it faces the withdrawal of foreign investment and the government and enterprises must fulfill their foreign currency payment obligations, even with the three major foreign exchange pillars of overseas remittances, tourism income and Suez Canal tolls, there may still be a gap in foreign exchange supply and demand.
According to a report released by the Central Bank of Egypt in October, as of the end of March 2026, Egypt's total foreign debt was approximately US$164.8 billion, an increase of US$3.6 billion compared with US$161.2 billion at the end of June 2025. However, during the same period, the ratio of external debt to GDP fell from 44.2% to 38.9%.
The Egyptian media Daily News Egypt quoted banking industry expert Mohamed Abdel Aal’s analysis on the 24th as saying that although Egypt’s foreign exchange earnings have improved, its capital needs are increasing faster. In the 2025-2026 fiscal year, remittances from Egyptian expatriates reached US$47.3 billion and tourism revenue reached US$18.4 billion. However, the current account deficit still expanded from US$15.4 billion to US$22.5 billion. Growth in Egypt's foreign exchange earnings may not necessarily offset greater import expenditures, foreign debt repayments and other foreign currency needs.
However, Abdul Al also reminded that we cannot judge whether the foreign exchange market is stable based on income figures alone. We must also observe the actual inflow and outflow of funds, as well as the market's expectations for future demand for U.S. dollars.
In terms of social and people's livelihood, the continued depreciation of the Egyptian pound may also increase the burden on people's livelihood. Since Egypt is highly dependent on imports for some food, energy, industrial raw materials and consumer goods, the depreciation of the Egyptian pound will increase the cost of imported goods and may push up prices through production, transportation and retail links, thereby weakening the purchasing power of ordinary Egyptian households.
Mohamed, a Cairo resident who runs a small shop, told the Central News Agency that the devaluation of the Egyptian pound has reached a new low, which is scary. If the depreciation of the Egyptian pound continues to push up inflation, the prices of goods in stores may rise accordingly, which will not only increase the operating costs of enterprises and merchants, but also further increase the pressure on consumers' family life.
