Cairo – The Egyptian pound’s value fell to a new record low. On Sunday, the exchange rate surpassed 52 pounds per dollar. This occurred amid the economic repercussions of the Iran war. The conflict is now in its second week.
The pound began its decline on the first day of the Iran war. It started from a level of 47 pounds per dollar. This indicates a depreciation of approximately 5 pounds to date. Local media reported this information from stock market traders.
Egypt’s economy relies heavily on imports. It has shown extreme sensitivity to currency fluctuations in the past. Foreign investments in treasury bills have withdrawn. This “hot money” outflow totals around $2.5 billion. The withdrawals began since the start of the war.
The American-Israeli war on Iran has extended to the Gulf region. This has disrupted global energy and trade markets. Shipping traffic in the Strait of Hormuz has virtually halted. Approximately 20% of the world’s crude oil passes through this strait.
Last week, President Abdel Fattah El-Sisi issued a warning. He stated the country is in a “state of near-complete emergency.” He also pointed to the potential for renewed inflationary pressures.
Egypt was not a direct party in the Iran war. However, the war’s repercussions have affected it. Some shipping companies have diverted away from the Suez Canal. The Suez Canal is a primary source of foreign currency for Egypt.