Egyptian pound faces short-term pressure but steadies by 2025-end: Fitch's BMI - Economy
The Egyptian pound is expected to remain under pressure in the near term, but Fitch Solutions' research arm, BMI, sees a slightly improved outlook for the currency by the end of 2025, despite ongoing global uncertainties.
In its latest report, MENA Monthly Outlook: Most MENA Currencies Will Likely Preserve Their Gains in 2H 2025, BMI maintained the pound's projected trading range at EGP 50–55 per US dollar. The report cites Egypt's substantial external financing needs and continued monetary policy easing as key factors behind the currency's near-term depreciation.
However, BMI now expects the pound to close 2025 at EGP 52/USD—a modest upward revision from its earlier forecast of EGP 52.53/USD—on the back of limited portfolio outflows.
The Central Bank of Egypt (CBE) has cautiously begun easing monetary policy, cutting key interest rates by a cumulative 325 basis points since the beginning of 2025. Amid the Israeli-Iranian escalation, the Egyptian pound has experienced volatility as investors moved towards safe-haven assets.
$2.1 billion exited market after US tariff move
'Investor reaction to the recent US tariff announcement was less severe than anticipated,' BMI noted. 'Only $2.1 billion exited Egypt after the tariffs were unveiled, which initially sent the pound to EGP 51.68/USD on 9 April. Since then, the currency and capital inflows have recovered, especially after the 90-day tariff pause and the US-UK and US-China trade agreements calmed markets.'
BMI warned that any renewed tariff tensions could trigger further capital flight and put more intense downward pressure on the currency. It stressed that Egyptian policymakers must manage these risks carefully while balancing the country's financing needs amid a fragile investment climate.
Inflation and growth outlook
BMI forecasts Egypt's inflation rate to average close to 10 percent between 2025 and 2029, with real GDP growth expected to exceed four percent annually over the same period.
The report also projects Egypt's current account balance to average 0 percent during the 2025–2029 period, indicating a perfectly balanced external position in which the country's total receipts from exports, services, income, and transfers match its payments to the rest of the world.
In practice, such a balance suggests the economy is neither reliant on foreign savings nor required to invest surplus capital abroad.
Regional currency performance shaped by the US dollar
More broadly, BMI sees swings in the US dollar and shifts in investor sentiment as the main factors shaping currency performance across the Middle East and North Africa (MENA) for the remainder of 2025.
'The weakening of the US dollar so far this year has driven an appreciation in the region's more flexible currencies,' BMI said. 'Looking ahead, we anticipate that a slightly softer dollar and reduced trade-policy uncertainty will continue to support MENA exchange rates against the greenback.'
However, the report warns that this outlook could deteriorate if key downside risks materialize. A renewed surge in the US dollar weighs on all MENA currencies.
Similarly, a return to heightened US trade tensions could reignite risk aversion toward emerging markets, leaving Egypt exposed to further capital outflows and additional pressure on the pound.
The analysis also flagged that lower oil prices would further weaken the Algerian dinar, intensifying its downward trajectory.
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