Egyptian Pound Drops 9% Against Dollar

The Egyptian pound has experienced losses against the US dollar due to the repercussions of the US-Israel conflict with Iran. Analysts expect inflationary pressures to remain limited on the demand side for a longer period than previously estimated. The central bank's capacity is expected to maintain its maximum potential despite these pressures. This decline is attributed to the rapid outflow of hot money from Egypt's secondary government debt markets. The government has implemented austerity measures to mitigate losses, including reducing foreign import invoices. Recent data shows a slight recovery in the currency's value following these policy shifts. This instability follows reduced foreign currency reserves caused by declining Suez Canal transit revenues and losses in the tourism sector. Economic growth forecasts for the current fiscal year have been adjusted to 4.2% from previous estimates of 4.7%. The central bank policy committee expects to target a growth rate of 5% for the 2027-2028 fiscal year. Some major investment deals have been signed within the country to offset losses. Egypt has also entered into several major domestic investment deals to mitigate losses. The Egyptian pound has depreciated by approximately 9% this year, increasing the costs of servicing the country's foreign debt.