Egypt’s Dollar Exchange Rate Falls to 48.4–48.5

Over recent weeks, the U.S. dollar has retreated in Egypt’s official market to around EGP 48.4–48.5, a level confirmed by the Central Bank of Egypt’s screen on August 19, 2025. This movement reflects two dynamics: a genuine improvement in foreign currency inflows, alongside monetary management that has bolstered liquidity through high-yield instruments attracting portfolio investment—or “hot money.” In other words, the decline is not artificial, but its sustainability depends on continued structural growth in dollar revenues.

Why is the decline genuine?

Net foreign assets in the banking system improved significantly this spring, following the completion of an IMF review. They surged in March and stabilized near those levels in May at $14.7bn, before rising further to $14.94bn in June, according to central bank data. This marks a sharp turnaround after years of deficits.

Remittances from Egyptians abroad also rebounded strongly after the exchange rate stabilized and the gap with the parallel market narrowed. The central bank reported a record $3.4bn in May, with cumulative inflows rising to $32.8bn between July and May of FY2024/25. These are “real dollars” entering official channels and boosting supply.

Tourism revenues are also recovering. Recent estimates put earnings at $14.1bn in 2024, with further growth expected in 2025—supporting Egypt’s external balance despite lingering safety and environmental challenges in the Red Sea.

Where does the “managed support” appear?

Following the major float in March 2024 and aggressive rate hikes, foreign portfolio investors returned strongly to Egyptian treasury bills. For instance, one-year T-bills achieved an average yield of 32.3% in the March 7, 2024 auction, with high coverage—a trend that continued into 2025. Such inflows are highly sensitive to interest rates and global risk sentiment: they push the dollar lower when entering, but can reverse direction upon exit, according to Reuters.

Monetary policy remains tight, with the overnight lending rate at 25% in July, per a Reuters poll. This sustains the pound’s attractiveness in the short term but leaves the currency vulnerable if global yields shift or risk appetite changes.

Macro headwinds and tailwinds

The Suez Canal continues to weigh on FX earnings after shipping routes were diverted in late 2023. Revenues in FY2023/24 dropped to $7.2bn from $9.4bn a year earlier, with monthly losses estimated at $800mn in early 2025 due to Red Sea disruptions. This drag may ease gradually but has not ended.

Meanwhile, the IMF has stressed that reducing the state’s role and ensuring fair competition in Egypt’s economy will take more time. The government expects to complete both the fifth and sixth IMF reviews by October. Any delay could shift portfolio flows and pressure the exchange rate.

Is the decline “genuine” or “managed”?

It is a mix: a real improvement in FX sources—remittances, tourism, and stronger net foreign assets—backed by high-yield inflows of hot money.

Could reliance on hot money trigger a “crisis” and push the dollar above 50?

The risk exists if portfolio outflows coincide with delays in IMF reviews or fresh shocks to the Suez Canal/global trade. However, the baseline scenario—assuming continued improvement in remittances, tourism, and IMF sign-offs in the fall—points to a fluctuating range around current levels, followed by gradual weakening, rather than a sharp surge, according to recent economic surveys.