Ahmed Kamel – Egypt Daily News
The Egyptian pound has surged to its strongest level against the U.S. dollar in nearly 20 months, marking its best performance since the currency was floated in March 2024, supported by a notable increase in foreign currency inflows and improving economic indicators.
During the first 12 days of 2026, the pound gained around 55 piastres against the dollar, reaching approximately 47.1 pounds for buying and 47.2 pounds for selling, according to data from the National Bank of Egypt and Banque Misr. This rise comes after a steady recovery in the second half of 2025, during which the pound regained nearly three pounds of its value amid growing confidence in Egypt’s economic outlook.
The currency’s movement reflects a market-driven exchange rate regime, where supply and demand determine the pound’s value without direct intervention from the Central Bank of Egypt. Following the floatation, the pound experienced significant volatility, falling to a record low of around 51.7 pounds per dollar in April 2025 before beginning a gradual recovery.
Economists attribute the recent appreciation to a sustained increase in dollar inflows from multiple sources, supported by the elimination of the parallel market and the establishment of a unified exchange rate. With banks now meeting import demand more effectively, foreign currency flows have increasingly returned to official channels.
One of the strongest drivers has been remittances from Egyptians working abroad. According to the Central Bank of Egypt, remittances rose by 42.5 percent year-on-year between January and November 2025, reaching a historic high of approximately $37.5 billion, compared with $26.3 billion during the same period a year earlier. The recovery of remittances through banks and exchange offices followed decisive measures by the central bank to curb illicit currency trading.
Foreign portfolio investment has also played a critical role. At the start of 2026, Egyptian banks reported renewed demand from foreign investors for local treasury bills, encouraged by high yields on pound-denominated assets and a perceived decline in risk. Since the March 2024 floatation, Egypt has attracted around $29 billion in foreign investment into treasury bills alone, bringing the total outstanding balance to a record $42.4 billion by the end of July 2025, central bank data show.
International institutions have responded with increasingly optimistic forecasts. Standard Chartered revised its outlook for the Egyptian pound in 2026, projecting the dollar to trade at around 47.5 to 49 pounds by the end of the first quarter, compared with earlier expectations of 49 to 51 pounds. The bank cited stronger foreign currency inflows, improved external balances, and tangible progress in structural economic reforms.
Similarly, Fitch Solutions, a subsidiary of Fitch Ratings, adjusted its projections to a more favorable range, expecting the pound to trade between 47 and 49 per dollar throughout 2026, instead of its earlier forecast centered solely around 49 pounds.
Overall, the pound appreciated by about 6.2 percent against the dollar in 2025, supported by rising portfolio inflows, robust remittances, and a rebound in tourism revenues. Analysts note that while the currency remains sensitive to global financial conditions and domestic reform momentum, the recent gains reflect a more balanced foreign exchange market and renewed investor confidence in Egypt’s economic trajectory.
As Egypt continues to implement fiscal and structural reforms, policymakers and market participants alike will be watching closely to see whether the pound’s current strength can be sustained over the medium term.
