Why is the Egyptian Pound testing new lows?
In the first week of April, the EGP hit a historic low against the US dollar, dropping to EGP 51.67/1 USD, before recovering slightly to EGP 51.24/1 USD. This raised broader questions: Is this fluctuation a natural market response or part of a deliberate strategy by the government to reprice the pound?
Egypt is committed to a flexible foreign exchange (FX) regime as part of its $8 billion loan deal with the International Monetary Fund (IMF). This means the EGP is vulnerable to further devaluation, especially amidst unprecedented global and regional challenges.
"What’s happening isn’t surprising — it’s the inevitable result of six core factors, ranging from foreign investment withdrawals, domestic pressures, and external obligations to rapidly evolving global political and trade contexts," banking expert Hani Mamoun explained to Ahram Online.
In December, Prime Minister Mostafa Madbouly disclosed that Egypt’s financing needs were around $22 billion.