The US dollar climbed to 54.6 Egyptian pounds at the National Bank of Egypt on Monday — its highest official rate on record — as the escalating US-Israeli war on Iran and growing risks to maritime navigation weighed on the currency. The pressure intensified after Yemen's Iran-aligned Houthi movement entered the conflict, launching its first missile attacks on Israel since the war began on Saturday.
The development raised concerns over potential disruptions to shipping in the Bab El-Mandab Strait, a critical chokepoint linking the Red Sea to the Gulf of Aden and a vital gateway for trade between Asia and Europe via the Suez Canal. The risk mirrors Iran's ongoing naval blockade of the Strait of Hormuz, the narrow waterway connecting the Persian Gulf to the Gulf of Oman through which roughly one-fifth of global oil supplies passes, which bars vessels linked to the United States, Israel, and their allies. President Trump has warned Iran against restricting shipping and signaled readiness to act to protect global oil flows.
“US military movements in the Middle East are adding to global uncertainty, prompting an outflow of foreign portfolio investments, the ‘hot money’, from emerging markets, including Egypt, and increasing pressure on the pound,” Salama Taha Hussein, Head of Equity Research Naeem Brokerage firm, told Al Manassa.
The conflict, alongside rising import costs, declining Suez Canal revenues, and foreign investment outflows, has increased pressure on the balance of payments and helps explain recent exchange rate movements, Hussein said.
Houthi attacks on commercial vessels in the Red Sea and Bab El-Mandab Strait since late 2023 have significantly disrupted global shipping. The assaults forced many shipping lines to reroute away from the Suez Canal, raising costs and transit times.
Suez Canal revenues dramatically declined during the Israeli assault on Gaza, dropping $8.7 billion in 2022–2023 to $3.6 billion in 2024–2025. Just as the canal had begun to show signs of recovery following the end of the war, the Israeli attack on Iran has again disrupted maritime traffic.
On Monday, Egyptian President Abdel Fattah El-Sisi appealed directly to Trump during a public speech, warning of serious regional repercussions and saying Trump is the “only one” capable of stopping the war, urging him to intervene.
Mohamed Abdel Aal, a board member of Egyptian Gulf Bank, attributed the dollar’s rise above 54 pounds primarily to its global strength as a safe haven in times of tension.
“The outflows of foreign portfolio investments from the local market contributed to the increase,” Abdel Aal told Al Manassa, estimating that around $9 billion in investments has been withdrawn from the market since the start of the tensions through the end of last week.
The US has deployed thousands of additional troops, alongside warships and aircraft, to the Middle East as the conflict escalates, raising the prospect of broader military intervention.
