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Why are Egyptian expats hesitant to send money back home?

Remittances by Egyptians working abroad plunged by 23 percent during the first half (H1) of the fiscal year 2022/2023, declining to $12 billion.
05.06.23 | Source: ahram online

Remittances are Egypt's main source of foreign currency, surpassing even the Suez Canal and tourism revenues. During the same period, the Suez Canal generated $4 billion while tourism brought in $7.3 billion. 


The plunge in remittances is ascribed by experts and expats alike to several factors, including diminished confidence in the economy and the fluctuations in exchange rates. 


Fluctuation in exchange rates

According to Khaled Abushadi, an economic analyst, the existence of dual exchange rates is among the key culprits behind the decline.


"As long as there are two exchange rates in the country there will be no stability in the market and there will be no trust as well. The situation requires not just devaluation, but a real flotation of the currency," Abushadi told Ahram Online.


Since March 2022, the Egyptian pound has lost almost 50 percent of its value. The official exchange stands at EGP 31 against the US dollar, but trades at EGP 37 on the black market.


The two exchange rates incentivizes many to hoard dollars, aggravating the existing shortage in the Egyptian market. According to the CBE, Egypt's net foreign assets (NFAs) deficit reached $24.42 billion in March 2023.


NFAs are the sum of foreign assets, including foreign currency, held by monetary authorities and deposit money banks, less their foreign liabilities.

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