Ahmed Kamel – Egypt Daily News
The Egyptian pound has become the world’s best-performing currency against the US dollar after a sharp rally pushed the exchange rate below 50 for the first time in more than three months. The move was driven by a surge in foreign inflows into Egyptian debt markets and improving investor sentiment across emerging economies.
The dollar fell to 49.86 pounds for buying and 49.96 pounds for selling in Wednesday’s trading, according to official banking data. The decline marks a significant reversal from recent pressure when the currency had approached the 55 level during earlier geopolitical stress.
Foreign investor demand for Egyptian treasury bills jumped sharply, with purchases in the secondary market rising about 162% to $2.75 billion in a single day. The increase reflects renewed appetite for high-yield local debt as global risk conditions improve.
Market flows have also shifted dramatically over recent months, moving from net foreign outflows of roughly $5.6 billion earlier in the year to estimated inflows of $6–7 billion over the past two and a half months. This reversal has been a key driver behind the pound’s rapid appreciation.
The currency has strengthened by around 4% against the dollar in just four days, making it the strongest performer among global currencies tracked by major financial data providers. The rebound follows a period of volatility during which the pound lost nearly 10% amid regional uncertainty.
Analysts say the recovery is being supported by multiple macroeconomic factors, including rising foreign exchange reserves, stronger remittance inflows, and improving net foreign asset positions in the banking sector. These fundamentals have helped stabilize market expectations in the short term.
Investor demand has been further supported by attractive yields on Egyptian treasury bills, which recently ranged between 24.59% and 25.66%. High interest rates continue to position Egypt as a leading destination for carry trade inflows among emerging markets.
Some market forecasts suggest the exchange rate could stabilize between 49 and 51 pounds per dollar if current inflows persist and geopolitical conditions remain calm. A further strengthening toward 47–48 has also been projected under more favorable scenarios.
Global financial institutions have also turned more constructive on Egyptian assets, with Citi strategists recommending positions in local currency government debt. The recommendation is based on expectations that easing regional tensions could reduce energy price pressures and support macroeconomic stability.
Egypt’s foreign reserves have continued to rise, surpassing $53.1 billion and extending a 45-month streak of increases to record levels. At the same time, remittances from Egyptians abroad climbed 33.2% to $39.2 billion, reinforcing external liquidity.
Overall, the pound’s rally reflects a combination of strong carry trade inflows, improving external accounts, and easing geopolitical risk perception. However, analysts caution that the outlook remains highly sensitive to global interest rates and shifts in investor risk appetite.
