Egyptian Pound Falls to Record Low as Foreign Investors Exit

Egypt’s currency has plunged to its weakest level ever, with the pound dropping below 52 to the US dollar on official markets for the first time. The sharp fall on Sunday reflects growing pressure on the economy as foreign investors pull billions of dollars from local bond markets.

Bank screens in Cairo showed the dollar buying at 52.15 Egyptian pounds and selling at 52.25 at major lenders, including Abu Dhabi Islamic Bank, Bank of Alexandria, and Banque Misr. The move represents a 4.3 percent drop in a single day, marking the lowest official rate ever recorded for the pound.

The depreciation comes during one of the most volatile periods regional economies have faced in years, as the war involving the United States, Israel, and Iran continues to escalate. Analysts say the uncertainty has triggered capital flight from Egypt, with estimates suggesting between 2 and 5 billion US dollars have been withdrawn in recent days. Most of the funds were pulled from Treasury bills and bonds that had previously attracted foreign investors with high returns.

Egypt has struggled with currency instability for several years. At the height of the crisis in early 2024, the dollar traded at around 70 pounds on the black market, while the official exchange rate was fixed at 30 pounds. Severe shortages of foreign currency at the time paralysed the economy, making imports difficult and driving inflation higher.

Later in 2024, the government unified the official and parallel market rates under an International Monetary Fund programme. That move brought the official rate closer to reality, stabilising it at around 50 pounds to the dollar. However, the latest slide shows renewed pressure on the pound as global tensions weigh on investor confidence.

Egypt’s economy, already burdened by high debt and inflation, now faces fresh challenges. The exit of foreign capital reduces foreign exchange inflows, making it harder for the government to finance imports and service debt. Economists warn that further depreciation could worsen inflation and increase hardship for ordinary Egyptians.

The government has not confirmed the exact scale of capital outflows, but preliminary banking data points to significant withdrawals. Officials are expected to monitor the situation closely as the pound’s weakness threatens to deepen the country’s economic crisis.

For now, the record fall of the Egyptian pound highlights the vulnerability of regional economies to global shocks, particularly as the Middle East conflict continues to spread.