The Egyptian pound plummeted to 53.59 against the US dollar on Thursday, marking a total loss of one full pound since the start of the week and further eroding the purchasing power of millions already struggling under the weight of a volatile global financial system.
The currency’s decline—a 60-piaster drop since Wednesday alone—comes as a direct consequence of a spike in global energy costs and the mass exodus of speculative “hot money” as investors flee regional instability.
Global oil prices surged to a four-year high today, crossing $122 per barrel. The spike is driven by fears of a prolonged supply disruption in the Middle East, exacerbated by the US blockade of Iranian ports and the continued closure of the Strait of Hormuz. Uncertainty also surrounds the future of the truce that halted the US–Israeli war on Iran in early April.
“The rising cost of petroleum imports has placed an immense dollar burden on the state, driving up demand for foreign currency at a time of extreme scarcity,” Walaa Mosallam, head of research at Prime Securities, told Al Manassa.
Mosallam noted that the pressure is compounded by foreign investors offloading Egyptian stocks, bonds, and treasury bills. She expects that as long as “geopolitical crises and war” persist, the pound is likely to slide further, potentially reaching the 54–55 range in the coming days.
Mostafa Shafie, former head of research at Arabiya Online, identified these hot money flows as the “secret code” behind the currency’s volatility. While approximately $3–$4 billion in foreign capital had returned since the start of the US–Iran truce, this follows a massive $8 billion exodus earlier this year. The latest flare-up in tensions triggered a new wave of capital flight, with $600 million to $700 million exiting the market by the end of last week.
According to the Egyptian Exchange’s (EGX) monthly report for March, foreign institutions recorded net sales in bills and bonds totaling 239.5 billion pounds (about $4.56 billion), up from 58.5 billion pounds (about $1.1 billion) in February. This surge in sales is linked to escalating regional risks following the outbreak of the US-Israeli war on Iran.
“Any diplomatic rapprochement between the U.S. and Iran, particularly regarding the Strait of Hormuz, would immediately stabilize both oil and dollar prices,” Shafie told Al Manassa.
The economic landscape faces further uncertainty following the UAE’s announcement on Tuesday that it will withdraw from OPEC and OPEC+ effective May 1. The move has left markets in a state of nervous anticipation, questioning oil-exporting nations' ability to collectively manage production and maintain the price stability essential for developing economies like Egypt.
