Egypt Daily News – The Egyptian pound recorded a historic decline against the U.S. dollar, losing more than 60 piasters and reaching 51.3 pounds per dollar during trading on Sunday, marking its lowest level ever. It later stabilized at 51.17, according to data from the National Bank of Egypt, amid rising concerns about the outbreak of a global trade war.
The head of the treasury department at one of Egypt’s largest private banks told Asharq, speaking on condition of anonymity, that “the pound’s decline was expected due to the disruptions affecting both local and global markets.
The recent decision by U.S. President Donald Trump to impose tariffs created a climate of anticipation and uncertainty, prompting foreign investors to withdraw some of their funds from emerging markets, including Egypt, as a precautionary measure to retain liquidity and assess the situation.”
Last week, U.S. President Donald Trump announced the imposition of tariffs of at least 10% on all imports to the United States, including from Gulf countries and Egypt, in addition to extra tariffs of 30% to 41% on imports from China, Japan, and several European countries.
This move exacerbated disruptions in financial markets, with oil prices falling to their lowest levels in four years, while bonds rose and stock indices declined in global markets, including in the Gulf and Egypt. This decline followed a warning from Federal Reserve Chairman Jerome Powell that the trade war’s effects could be worse than expected, with consequences including rising inflation and slowing global growth.
Temporary Shock Phase
The head of the treasury department added, “As long as foreign funds continue to leave, pressure on the pound will remain. We are in a temporary shock phase until the markets absorb the tariff decisions or the U.S. backs down from them.”
Observers believe that the implications of Trump’s new trade policy could go beyond tariffs and affect global supply chains and raw material prices, potentially creating cross-border disruptions impacting various economies.
Two heads of private banks in Egypt told Asharq that the partial withdrawal of foreign investors from government debt instruments was among the main factors behind the pound’s decline.
Egypt Sells Treasury Bills Below Target
In parallel, the Central Bank of Egypt, on behalf of the Ministry of Finance, sold local treasury bills on Sunday for 3- and 9-month terms worth about 6.1 billion pounds, achieving only 9% of the total liquidity target of 70 billion pounds, amid a rise in the yield offered by investors, which reached 33.5%.
The Egyptian Ministry of Finance revealed that foreign investments in government debt instruments amounted to $41.3 billion by the end of December.
