The dollar price in Egypt exceeds 53 Egyptian pounds: Reasons and expectations

Introduction to the developments in the dollar exchange rate in Egypt

The financial markets and banking sector witnessed a notable development at the start of the week, with the dollar rising by 1% in Egypt, returning to trading above 53 Egyptian pounds in most Egyptian banks. This increase comes after the dollar experienced slight fluctuations below 53 pounds during last week's trading, influenced by the varying pace of inflows of indirect foreign investments, known as "hot money," into Egyptian debt instruments. This renewed decline in the pound against the dollar reflects the dynamics of supply and demand under the flexible exchange rate policy.

Dollar exchange rates in Egyptian banks

According to the latest statistics and banking reports, exchange rates varied among banks operating in the Egyptian market, and the details are as follows:

• Highest exchange rate: Abu Dhabi Islamic Bank, Suez Canal Bank, SAIB Bank, and Kuwait Finance House recorded the highest dollar exchange rate at 53.35 Egyptian pounds for buying and 53.45 Egyptian pounds for selling.
• Lowest exchange rate: Emirates NBD Bank offered the lowest exchange rate for the US dollar at 52.75 Egyptian pounds for buying and 52.85 Egyptian pounds for selling.
• Major public and private banks: At the National Bank of Egypt and the Arab African International Bank, the exchange rate was 53.26 Egyptian pounds for buying and 53.36 Egyptian pounds for selling. Meanwhile, at Banque Misr, Next, National Bank of Kuwait, Faisal Islamic Bank, Midbank, United Bank, HSBC, and the Industrial Development Bank, the rate was approximately 53.25 Egyptian pounds for buying and 53.35 Egyptian pounds for selling.
• Central Bank of Egypt: The average official exchange rate at the Central Bank has stabilized at 52.83 Egyptian pounds for buying and 52.97 Egyptian pounds for selling.

The economic and historical context of exchange rate flexibility

These moves come as part of the Central Bank of Egypt's commitment to a flexible exchange rate policy, a strategic step adopted to eliminate the parallel market and ensure the currency is priced according to genuine market mechanisms. It is worth noting that the Egyptian pound ended 2025 with a strong performance, appreciating by 6.7% against the dollar since the beginning of last year. This recovery was supported by a record surge in remittances from Egyptians working abroad, which are one of the country's most important sources of foreign currency, in addition to the restoration of dollar liquidity in the banking sector and inflows of foreign direct investment.

Impact of regional geopolitical tensions

At the regional and international levels, geopolitical tensions play a crucial role in capital flows. A recent economic report revealed that Egypt's flexible exchange rate acted as a buffer, helping the local economy absorb the repercussions of a partial outflow of foreign capital. This outflow was a natural reaction from investors seeking safe havens amidst escalating geopolitical tensions linked to conflicts in the Middle East, including those related to Iran. The flexible system allowed for the absorption of these shocks without a sharp depletion of international reserves.

Fitch Ratings and the Monetary Reserve

In a related development concerning future prospects, Fitch Ratings issued a report predicting a slight decline in Egypt's foreign currency reserves to approximately $50 billion by the end of the 2026-2027 fiscal year. Despite this anticipated decrease, this level of reserves remains secure, covering roughly four months of external payments and commodity imports. This aligns with international standards for economic security and ensures the country's ability to meet its external obligations and secure strategic commodities.