Opinion | Why is the US dollar rising despite improvements in most of Egypt’s economic indicators?

The Egyptian pound has experienced noticeable fluctuations against the US dollar in recent days, reflecting a combination of domestic and global factors, particularly the following six: First: Revenues have improved, but financing needs have grown even faster The issue cannot be measured solely by the volume of incoming flows. It must also take into account accumulated demand and outstanding obligations. Regional and international geopolitical tensions since the end of last February have prompted widespread precautionary pricing and increased immediate demand for foreign currency among importers and businesses seeking to secure inventories and meet their requirements. Under a flexible exchange rate regime, upward and downward movements in the exchange rate reflect the balance between supply and demand.

Improved inflows have faced substantial pressure from external debt repayments, profit repatriation by foreign investors, and the need to cover import requirements, alongside the effects of imported inflation and rising global prices for strategic commodities. The Central Bank of Egypt’s figures for FY2025/2026 show that remittances reached $47. 3bn and tourism revenues totalled $18. 4bn. Nevertheless, the current account deficit widened from $15. 4bn to $22. 5bn. This provides the most important explanation for the apparent contradiction: improvements in major sources of foreign currency did not prevent the gap between current receipts and payments from widening. The overall balance of payments surplus of $2. 8bn was achieved with support from financing and investment flows. These figures, covering the period to June, provide background to one of the main reasons for the dollar’s appreciation: increased demand for foreign currency to finance imports. However, they do not, on…