Dollar tops EGP 55 as outflows and energy costs pressure Egypt
The dollar climbed above 55 Egyptian pounds on Thursday for the first time, extending its rise since the start of the week. The move coincided with foreign investors withdrawing about $2 billion from the secondary market for debt instruments on the Egyptian Exchange since the beginning of the week, according to stock exchange data.
Foreign investment outflows, mounting energy import costs, and fears of a wider regional conflict involving Saudi Arabia and the Houthis have piled fresh pressure on the Egyptian pound, according to Esraa Ahmed, macroeconomic analyst at brokerage firm Thndr.
The triple strain has heightened demand for dollars, further squeezing the country's trade balance as higher energy prices inflate Egypt’s petroleum import bill.
Markets had previously treated regional instability as a localized crisis that spared Egypt directly, allowing the pound to maintain relative stability, Ahmed told Al Manassa. However, growing speculation over potential Egyptian military involvement has refocused investor attention on the country's broader economic risks, sparking capital flight and compounding pressure on the foreign exchange market.
Brent crude futures rose by $3.60, or 3.3%, to $112.44 a barrel during Thursday’s trading, approaching a five-month high before settling at around $112 a barrel.
The dollar outlook
The pound’s trajectory over the coming months hinges on greater clarity surrounding Cairo's military posture, Ahmed said, noting that markets are weighing whether any deployment would remain a limited defensive measure or escalate into higher-risk operations.
A de-escalation in fears over the extent of Egypt's involvement could relieve pressure on the foreign currency market and pull the dollar back toward lower levels within the forecasted range, she added.
Egypt’s external debt rose by about $1.68 billion in the second quarter of this year to $166.45 billion, up from $164.77 billion in the first quarter, according to World Bank data. Meanwhile, Egypt faces $60.9 billion in external debt repayments between July 2026 and June 2027.