Egypt’s currency is under increasing pressure, as the wider impact on international markets caused by geopolitical turmoil in the Middle East adds to problems at home from its own financial and economic crisis.
The rush to the dollar as the war in Gaza persists has hit both the Egyptian pound’s exchange rate on global markets and its dollar income from the Suez Canal as ships steer clear of the Red Sea amid Houthi attacks on vessels there.
Unofficial exchange rates on the black market are also rising as the country struggles under a debt mountain.
Such conditions amount to a deterrent for foreign investment in Egypt. Some firms in Egypt are already considering exiting the country and its markets.
The timing is terrible, not least because Egypt still faces the prospect of having to support refugees from Gaza. Calls for a humanitarian route into Sinai have not gone away.
Two of Egypt’s major revenue streams are tourism and transit fees from the Suez Canal, but foreign currency income from the latter has dropped by 40% — a major blow to the nation’s finances.
Remittances home have also fallen, as Egyptians living abroad keep hold of their money, while those still in Egypt are witnessing growing unemployment.
This has added to concern that Cairo may struggle to meet its financial obligations.