7/4/2025–|Last update: 7/4/202505:42 PM (Mecca time)
The Egyptian pound fell by more than 2% in the external market, today, Monday, to record its lowest level ever at 51.62 pounds against the dollar before it reduced its losses to 51.36 pounds per dollar, according to a Bloomberg report.
The decline came after unrest that swept global markets after US President Donald Trump imposed a series of comprehensive customs duties on various countries, while it is known as “Trade Liberation Day”.
Although Egypt was one of the countries that faced the lowest percentage of the fees announced by Trump -10%, compared to 17% on Israel and 39% on Iraq – emerging markets were not immune to the repercussions, as foreign investors fled the assets of high risks towards safe havens.
Group escape from Egyptian debt tools
According to Goldman Sachs and Investment Bank Hermes in Cairo, the Egyptian markets have witnessed the displacement of more than a billion dollars from foreign portfolios investments, especially from the debt tools market, which was from the top global return within what is known as the “Carrie Water” strategy.
“The global shift towards avoiding the risks raised by Trump’s duties has reduced investors for their exposure to all assets of risk, including Egypt,” said Farouk Sousse, chief economist Goldman Sachs for the Middle East and North Africa.
He added that “Egypt’s economy is a relatively fragile economy in terms of credit rating, and that Egypt faces significant external financing needs, which makes it vulnerable to extensive sale.”
Expectations of the dollar to reach 54 pounds
According to Monica Malik, the chief economist at Abu Dhabi Commercial Bank, the Egyptian pound may continue to decline, with the possibility of reaching 54 pounds to the dollar, unless the current fluctuations are contained. However, she indicated that “the international community’s support for the economic reform program in Egypt, especially the International Monetary Fund, is still an important factor that maintains the confidence of investors.”
In March 2024, Egypt carried out a major reduction in the value of the pound in an attempt to end the crisis International Monetary FundIt is a step that provided temporary stability before the recent wave of fluctuations.
The benefit decision in the scale
The decline in the current pound coincides with the anticipation of the markets of the Central Bank of Egypt on April 17, as the noticeable slowdown in the inflation rate – which fell to half in February – opened the door for the first reduction in the interest since 2020.
However, Malik warned that “the continuation of fluctuations may push the central bank to keep interest rates unchanged, in order to preserve the attractiveness of local returns for foreign investors.”
For his part, Hermes Bank indicated in a research note that the monetary facilitation course is still in place, but the expected scope of reduction may decrease to the minimum previous estimates (200 basis points), due to the increasing state of uncertainty.
Exports are not in danger
On the positive side, Sousse explained that Egypt does not depend much on exports as a major growth engine, which makes it “less vulnerable to customs duties.” With a currency resisting with less than its real value and support from the International Monetary Fund, Egypt – according to him – “is in a good position to benefit when the appetite for the risk returns to the markets.”
Nevertheless, the scene of the Egyptian economy remains dark at the present time, as global pressure intersects with internal weaknesses, and the country’s monetary and financial stability threatens unless additional measures are taken to curb the existing fragility, according to the conclusion of the Bloomberg report.
