However, the report also noted that the Egyptian pound will face significant challenges.
The Egyptian pound is expected to continue fluctuating throughout 2025, according to a recent report from BMI, the research arm of Fitch Solutions, with projections indicating that it will trade between EGP 50-55 against the USD.
By the end of the year, the currency is forecast to settle around EGP 52.5 per dollar.
Several factors are anticipated to help balance the downward pressures on the Egyptian pound, including the IMF's approval of the latest review of Egypt’s loan program, successful debt issuances by the government, and the resumption of normal maritime navigation in the Red Sea.
This is expected to bring an additional $400-500 million per month in revenues to the Suez Canal, providing further support to the economy.
However, the report also noted that the Egyptian pound will face significant challenges.
Geopolitical conditions, a rising import bill, and the maturity of external debts due in March are expected to put additional pressure on the currency.
Additionally, investor reluctance toward emerging markets could lead to capital outflows, further exacerbating Egypt’s economic difficulties.
While the Egyptian pound faces continued volatility, the report suggests that the currencies of neighboring countries such as Tunisia, Morocco, and Algeria will remain largely stable, with minimal fluctuations expected in 2025.
The US Dollar’s movement is noted to have a direct impact on currencies in the region, particularly the Tunisian dinar and the Moroccan dirham, with a lesser effect on the Algerian dinar.
However, Egypt's currency faces additional vulnerabilities due to its reliance on imports, especially the $20 billion annual cost of petroleum product imports.
President Abdel Fattah El-Sisi recently emphasized that Egypt is engaged in a “battle against the dollar shortage” as the country continues to struggle with foreign currency shortages.
Ramona Moubarak, head of MENA Country Risk at Fitch Solutions, warned that a shift in investor sentiment toward emerging markets could lead to large capital outflows during an interview last week. She was discussing the potential impact of US President Donald Trump’s re-election on Middle Eastern economies, with his policies potentially influencing investor confidence in the region.
Egypt has re-entered the international debt markets today with a new series of senior unsecured notes, as disclosed on the London Stock Exchange by JP Morgan Securities, which has been appointed as the Stabilization Coordinator.
