The EGP closed 2025 on a high note, having appreciated 6.7% for the year against the greenback. Driven by a record-breaking surge in remittances, surging tourism, and improving exports, the EGP is widely projected to strengthen further in 2026 as the nation moves from a “vicious cycle” of devaluation to a “virtuous cycle” of upgrades, according to industry experts we spoke to.

By the numbers:

  • Record reserves: Foreign exchange reserves reached a record USD 50.215 bn in November;
  • Remittance surge: Inflows from Egyptians abroad hit an unprecedented USD 33.9 bn in the first ten months of 2025 — a 42.8% y-o-y increase since the March 2024 float;
  • NFA rebound: Net foreign assets (NFAs) reached USD 22.7 bn by end-October, marking a massive recovery from the negative territory that defined 2022–2024;
  • Suez Canal recovery: While Red Sea tensions cut Suez Canal revenues to USD 3.6 bn in fiscal year 2024-2025, a gradual rebound to USD 5.5 bn is expected by FY 2026-2027 as trade activity normalizes.

“When these indicators come together, they generate a compounded effect known as the accumulation of foreign currency surplus, which helps address the liquidity shortages that have historically put pressure on the EGP,” EG Bank Board Member Mohamed Abdel Aal tells us.

A series of strategic and global shifts are helping prop-up the EGP:

  • Positive real interest rates: Egypt remains a magnet for foreign investors in local debt instruments. High positive real rates — maintained even as inflation cools — ensure a sustainable inflow of USD to meet financing needs, Abdel Aal tells us.
  • The sharp decline in credit default swap spreads makes it easier for Egypt to issue new bonds and sukuk, Al Ahly Pharos’ Hany Genana tells us.
  • Strategic economic and fiscal measures: Major investment transactions are expected to conclude, bringing in fresh USD inflows or facilitating debt swaps. The government is moving ahead with its asset privatization plans, including assets like Banque du Caire.
  • Lower energy prices: A decline in global prices for imported oil and gas, coupled with higher domestic production and increased imports via pipelines, is expected to slash the trade deficit.

Our take: For the private sector, the story is less the absolute exchange rate but the death of both the parallel market and the fear-based pricing it sparked. Manufacturers who once priced goods based on their expectations of future black-market rates are returning to rational planning. With the USD now readily available in banks, the EGP has shifted from a source of daily anxiety to a stable anchor for corporate budgeting.

The IMF factor: The successful conclusion of the IMF’s fifth and sixth reviews paves the way for a USD 2.7 bn payout in January. While the program expires in October 2026, the IMF agreement is now a “certificate of confidence” rather than a “life support machine,” Federation of Egyptian Industries board member Mohamed El Bahy tells us. He added that with USD 50 bn investment agreements now on the table, a single IMF tranche is no longer the needle-mover it once was.

Going forward: “Even after the IMF [program] ends, the lessons learned over the last two years have fundamentally changed the mindset of Egyptian economic management. There is now a consensus among the government, experts, and the private sector that rational, stable management is the only way forward,” Genena tells us.

What to watch in 2026:

  • Where will the EGP trade against the USD this year: Abdel Aal sees an EGP 45–55 range, while Genena is more bullish, projecting an average of 46 EGP;
  • Interest rate path: Genena suggests that anticipated interest rate cuts in the coming year — potentially up to 800 bps — will not negatively impact the EGP, attributing this to a broader global trend of monetary easing;
  • The risks: Heavy debt service obligations and the potential for a surge in “non-essential” imports as liquidity improves remain the primary “resistance elements” to further appreciation, Abdel Aal says.
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