What are the implications of the fluctuation of the Egyptian pound exchange rate against the dollar, and does it impact the Egyptian economy negatively or positively? Initially, Egyptian stock market expert Hanan Ramses states that the fluctuations are exaggerated, emphasizing that the float in Egypt is a managed one. The Central Bank creates impressions of a decline in the dollar rate, attributing this to the availability of dollars due to deals Egypt makes and the rise of foreign exchange reserves to 50 billion dollars.
She added in her talk with ” ” that the only ones dealing in foreign currency are the ones controlling the increase and decrease in the price. She confirmed that the reduction of the dollar price against the pound is not the strength of the pound but could be a weakness of the dollar globally due to the closure plans followed by the US Federal Reserve or the US Congress due to the rising US debt ceiling, giving them the power to lower the dollar against the pound.
She pointed out that lowering the dollar price helps reduce the accumulated debts, decreases the interest paid by the Central Bank to the public and the household sector deposited in banks. Additionally, since the state is the biggest borrower from the banking system, it benefits from the reduction in loan interest values it uses to finance its projects and various items, employing either foreign or Egyptian currency.
Regarding its impact on the economy, the expert said that this reduction in the dollar price against the pound has a positive impact on the macroeconomy, but it causes panic among foreign dealers, especially investors in debt instruments or the stock market.
She explained that a foreign investor who buys stocks by converting dollars at a high price (for example, 48 pounds) will incur losses when converting back to dollars at a lower price, which affects their profits.
Ramses confirmed that this situation makes foreign dealers hesitant to deal with or buy assets or any investments due to currency instability. Just as successive increases in the currency price worried them, the successive decreases at the same pace make them watch cautiously, wondering, “Perhaps the dollar might decrease further… Why should I buy an asset valued in dollars at a high price while I can buy it later at a lower price, stopping many deals.”
Ramses noted that Gulf dealers act wisely; if they deal with the state, they pay part in advance and wait for the remaining parts over the medium and long term to benefit from all advantages, for instance, where there was an initial payment followed by several payments, or they deduct from debts or deposits existing in the Central Bank.
The stock market expert said, “I’ve noticed that Gulf dealers know how to act well, but the problem lies with foreign investors who fear the sharp drop in the currency price, as I mentioned, ‘100 percent managed flexibility and clear to the blind.'”
Ramses expressed her amazement at a state with debt installments and external debts in trillions of dollars managing to lower its currency price. This is ‘beyond logic,’ pointing out that it pays its debts on time, but its ability to lower the dollar price under these circumstances is something we have not seen before, and even the world around us is astonished by these behaviors not found in any other country.
On his part, Egyptian economist Hani Abu Al-Fotouh says, “The Egyptian pound exchange rate has witnessed notable fluctuations against the US dollar recently, raising questions about the impact of this volatility on the economy as a whole. It is important to assess these fluctuations objectively as they have both negative and positive aspects to consider.”
He added in his talk with “Sputnik” that “on the negative side, it relies heavily on imports to meet its needs for basic commodities like food and medicine, and when the pound declines, the dollar price rises, increasing the cost of these goods and putting pressure on prices, leading to inflation and reducing citizens’ purchasing power. For example, the annual inflation rate reached its highest before the end of 2024 (exceeding 35 percent) and then decreased to 12.5 percent in October 2025, according to data from the Central Agency for Public Mobilization and Statistics, illustrating the impact of these fluctuations on living costs.”
Abu Al-Fotouh continued, “On the positive side, the depreciation of the pound supports in global markets, making goods like fruits and textiles more attractive to importers, but this improvement cannot persist unless major structural issues in the Egyptian economy, such as high public debt and lack of foreign investments, are addressed.”
The economist pointed out that “currently the dollar price reached about 47.2 pounds, with relative stability after the pound’s flotation decision in March 2024, and foreign inflows from loans and investments have temporarily supported the pound, but these cannot be relied upon permanently.”
Last Thursday, Egyptian Prime Minister Mostafa Madbouly witnessed the signing of an Egyptian-Qatari investment partnership agreement to develop the Alam Al-Roum area in Marsa Matrouh, which includes building international hotels, residential neighborhoods, commercial centers, and service areas.
In his speech, Prime Minister Mostafa Madbouly said, “The Egyptian economy is witnessing significant growth under the directives of President Abdel Fattah El-Sisi,” confirming that “development operations in sectors of industry, agriculture, technology, and tourism will have a positive impact on the Egyptian economy.”
He added that “the tourism sector is at the top,” continuing, “The Egyptian vision focuses on developing tourist areas, especially the North Coast, aiming to accommodate over 17 million people.”
Last week, Egypt and Qatar announced the development of the ‘Samla and Alam Al-Roum’ area in the city of Marsa Matrouh. This comes within the framework of activating the Qatari investment package in Egypt, agreed upon during previous discussions between the Egyptian President Abdel Fattah El-Sisi and the Emir of Qatar Sheikh Tamim bin Hamad Al Thani, according to a statement from the Egyptian Prime Minister’s Office. This agreement was reached on the sidelines of the first summit of the Global Coalition to Combat Hunger and Poverty, held in the Qatari capital, Doha, attended by Egyptian Prime Minister Mostafa Madbouly, Egyptian Minister of Social Solidarity Maya Morsi, and Egypt’s Ambassador to Qatar, Walid Al-Faqi.
The Qatari Prime Minister confirmed “the keenness on the ties between the two countries in various fields and supporting and activating Qatari investments in Egypt in several different sectors, expressing his country’s full support for Egyptian efforts on various fronts, and praising the ongoing coordination between the two countries on the Palestinian issue.”
The meeting also addressed “the importance of pushing forward the work to implement the recommendations and decisions of the sixth session of the Egyptian-Qatari joint high committee held in August 2025 in the new city of Alamein, ensuring the enhancement of relations between the two countries, as well as stressing the importance of working on the implementation of the memorandums of understanding concluded during that session, contributing to the mutual interest of both sides.”
