EGP extends its rally against the greenback

Good afternoon, friends, and welcome to the start of another workweek. At home, the news cycle — and the EGP — seems to be taking a breather. Meanwhile, international headlines remain focused on the latest developments in Gaza.

THE BIG STORY TODAY

EGP extends its rally against the greenback: The EGP continued its upward move against the greenback today, reaching its highest level since October 2024. The USD has been changing hands at EGP 48.85-48.95 at the National Bank of Egypt and Banque Misr and at EGP 48.83- 48.93 at the CIB during today’s trading.

An improved FX inflow and a higher supply of USD liquidity are driving up the EGP recovery against the greenback, a source in the banking sector told EnterpriseAM today. “We are seeing weekly inflows of USD 1 to 1.2 bn into debt instruments,” the source said. This happens as interest rates rise and geopolitical tensions ease, luring foreign inflows back into the local debt market, the source added.

Interbank USD transactions have fallen to between USD 100-200 mn daily, thanks to the plentiful USD supply at local banks, the source noted.

This strengthening pattern began last week, driven by substantial USD-denominated inflow, two sources in the banking sector told us at the time. These inflows coincided with the beginning of the new fiscal year, a decline in debt obligations, and rising tax revenues, according to our sources.

THE BIG STORY ABROAD

Earlier today, Israel announced a daily 10-hour pause on military operations in Gaza, which would allow new aid corridors in the strip. The pause is in effect until further notice in Gaza City, Al Mawasi, and Deir El Balah. Designated secure routes for food and aid delivery have also been announced, set to operate from 6am to 11pm daily, starting today. Israel said that it began airdropping aid into Gaza — which included pallets of flour, sugar, and canned food — following international pressure.

HOWEVER– Just hours after the announcement of the pause, witnesses in Gaza reported an Israeli airstrike on a residential building in Gaza City, resulting in two deaths and several injuries.

REMEMBER- Last week, over 100 international aid organizations and human rights groups — including Doctors Without Borders, Mercy Corps, and Refugees International — called for the full lifting of restrictions on humanitarian aid, citing a worsening hunger crisis. Hours ago, the Gaza Health Ministry reported six additional deaths due to malnutrition within the past 24 hours, adding to an alarmingly rising number of malnutrition-caused casualties. (CNN | BBC | Reuters)

MEANWHILE– Clashes between Cambodia and Thailand have carried on for the fourth day, even after US President Donald Trump announced that both sides had agreed to begin ceasefire talks. Cambodia expressed immediate support for a ceasefire, while Thailand said it agreed in principle but would not halt operations without further talks. Despite intervention and threats to suspend trade agreements if fighting persists, artillery shelling, drone strikes, and air raids have continued. So far, around 32 people have died and over 200k have been displaced. (CNN | BBC | Reuters)

*** It’s Inside Industry day — your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

In today’s issue: We take a look at the government’s plan to launch a green finance platform for factories.

☀️ TOMORROW’S WEATHER- Stay cool and indoors if you’re in Cairo, because tomorrow temperatures are set to peak at 41°C, before dropping to 26°C. Up north, the weather will be relatively less intense with a high of 33°C and a low of 27°C, according to the Egyptian Meteorological Authority.