The currency of Egypt fell to its weakest level on record on Sunday, with the Egyptian pound dropping for the first time beyond 52 pounds per US dollar in official trading. Bank screens in Cairo showed the dollar buying at 52.15 pounds and selling at 52.25 pounds at major lenders including Abu Dhabi Islamic Bank, Bank of Alexandria and Banque Misr. The decline represents a single-day drop of about 4.3%, marking the weakest official exchange rate ever recorded for the currency. Analysts attribute the sharp depreciation partly to rising geopolitical tensions in the Middle East, particularly the escalating conflict involving the United States, Israel and Iran. The uncertainty has prompted foreign investors to pull funds from Egyptian financial markets.
Preliminary banking data suggests that between $2 billion and $5 billion may have flowed out of Egypt’s local bond and Treasury bill markets over the past week. These securities had previously attracted international investors seeking high returns in emerging markets. Egypt’s currency has experienced significant volatility in recent years. During the country’s severe economic crisis in early 2024, a shortage of foreign currency pushed the dollar to around 70 pounds on the black market, while the government maintained an official rate of about 30 pounds per dollar. Later in 2024, authorities moved to unify the official and parallel exchange rates under an economic reform programme supported by the International Monetary Fund. Following that step, the official rate stabilised near 50 pounds per dollar before the latest slide. The current decline highlights the vulnerability of emerging economies to global financial shocks and regional instability, as Egypt continues efforts to stabilize its currency and attract foreign investment.
