The Egyptian pound tumbled to a record low on Sunday, with the US dollar climbing above 52 pounds for the first time, underscoring mounting pressure on local markets as investors pulled money from Egyptian assets. The move sent domestic gold prices soaring by more than 300 pounds per gram, or about $6, despite global exchanges being closed.
The selloff reflects growing concern over the fallout from the US-Israeli war on Iran, which has rattled traders and fueled volatility across currency and commodity markets. At the National Bank of Egypt, the dollar’s selling price rose by 2 pounds at the start of Sunday’s session, marking a 4% jump from Thursday’s close. Central Bank data show the official exchange rate had never previously breached the 52-pound level.
Central Bank data show the official exchange rate had never previously reached 52 pounds to the dollar.
Mustafa Shafie, research director at Acumen Asset Management, told Al Manassa the pound’s decline was driven by continued foreign selling in the stock market and outflows from government debt instruments amid concern over the consequences of the US-Israeli war on Iran.
“The current policy of the central bank under Governor Hassan Abdalla is very clear. It does not intervene in any way in setting the dollar price in the local market and relies on supply and demand,” Shafie added.
The dollar has continued to rise against the pound as the US-Israeli war on Iran has expanded. It stood at 47.64 Egyptian pounds on February 22, then hit 50 pounds for the first time in months last Tuesday, before breaking through 52 pounds on Sunday for the first time.
Egypt weathered a similar bout of market turmoil in 2022, when about $20 billion fled its debt market in a matter of weeks, triggering a severe foreign currency crunch. The latest wave of outflows has revived fears of renewed liquidity stress, but analysts say the central bank’s stronger reserve position compared with that earlier shock provides a cushion that could help absorb the pressure.
Local gold prices also rose despite the closure of global exchanges and the halt in trading. The price of 21-karat gold, Egypt’s best-selling grade, climbed to 7,550 pounds (about $145), up by more than 300 pounds per gram.
