Egypt’s pound fell to a record low on Sunday, slipping past 52 to the US dollar in official trading for the first time as foreign investors accelerated their withdrawal from local debt markets during one of the most volatile weeks for regional economies in years.
As the US-Israeli war against Iran continues to escalate, bank screens in Cairo showed the dollar buying rate at 52.15 Egyptian pounds and selling at 52.25 across major lenders, including Abu Dhabi Islamic Bank, Bank of Alexandria, and Banque Misr.
The level represents a one-day drop of about 4.3 per cent and the weakest official rate on record.
At the height of Egypt's economic crisis in early 2024, the dollar was trading at around 70 pounds on the black market as a severe foreign currency shortage gripped the economy.
However, that rate reflected parallel‑market activity rather than the then‑official exchange rate, which was fixed by the state at 30 pounds.
After the government unified the formal and informal rates under an IMF programme later in 2024, the official rate settled near 50.
There has been no official confirmation on the exact size of foreign capital exits, but substantial outflows have taken place since the conflict began a week ago, according to preliminary banking data and analysts who spoke to The National.
Their estimates range between $2 billion and $5 billion, largely from Treasury bill and bond holdings that had attracted overseas investors with high real yields.
They said that investors are retreating from emerging-market assets amid growing global risk aversion sparked by the war in Iran.
The Egyptian pound’s slide occurred against a backdrop of widespread turmoil in global markets. Brent crude has climbed above $92 a barrel, up 28 per cent in a week.
About 20 million barrels a day of oil that normally transits the Strait of Hormuz in peacetime are now effectively stranded, as tanker traffic through the waterway, which has not formally closed, has ground to a near standstill. Global equity markets have meanwhile lost more than $3 trillion in value since hostilities began on February 28.
Egyptian Prime Minister Mostafa Madbouly said earlier this week that the government is moving to secure additional energy imports before further price increases, citing contingency measures to support domestic demand.
Additionally, Egypt's central bank announced last week that the country’s net foreign exchange reserves rose to $52.746 billion in February – a record high – compared with $52.594 billion in January, it said.
Officials maintain that reserves are sufficient to absorb continued currency volatility from the US-Israel-Iran war and that the government has enough food and fuel for at least six months. They have repeatedly assured the public that no significant price increases were on the way.
