USD falls below EGP 50 for the first time since March

Good afternoon, ladies and gents, and congratulations on making it to the long weekend. You’ve earned it — and we’re sending you off in style. Tonight’s football alone is worth staying up for: England vs. Croatia, a 2018 semifinal rematch, plus Messi’s hat trick from last night still rattling around in our heads.

Elsewhere in today’s issue, the Grand Egyptian Museum is redefining what a museum can be — ballet, opera, and the pyramids as a backdrop will do that — and we have an emotion-heavy novel worth cracking open over the break, and a Saturday plan involving yacht Pilates in Alexandria, if you're feeling particularly adventurous.

**A QUICK PROGRAMMING NOTE- EnterprisePM is taking a publication holiday tomorrow in observance of the Islamic New Year and will be back in your inboxes on Sunday afternoon. Until then, enjoy the long weekend.

Without further ado, the news…

THE BIG STORY TODAY-

📍 The USD fell below the psychological EGP 50 mark across several local banks on Wednesday for the first time since March, extending the EGP’s recovery as regional geopolitical friction eases and foreign currency liquidity strengthens. The greenback traded at EGP 49.96 (buy) and EGP 50.07 (sell) at state-owned NBE and Banque Misr, while the rate reached EGP 49.90 (buy) and EGP 50 (sell) at CIB.

Behind the rally: A government source tells EnterpriseAM that today’s EGP appreciation was driven primarily by the exceptionally strong inflows recorded in the secondary market yesterday, with foreign portfolio investments rising by USD 1.1 bn — the largest single-day inflow since March. The source notes that the market did not witness similarly exceptional inflows today as investors moved to exit positions in the secondary market to lock in gains, reflecting expectations of a potential rebound in both the exchange rate and yields on local debt instruments.

The correction marks a sharp reversal from the record highs of over EGP 54 triggered by the flare-up of the US-Iran war, fueled by a steady revival of hot money inflows, resilient remittances, and record-high foreign reserves. Banking expert Shaimaa Wagieh tells EnterpriseAM that breaking below EGP 50 is “a positive signal that reflects a relative improvement in foreign currency inflows and the return of some confidence to the FX market, particularly amid rising international reserves and improving external indicators.” However, Wagieh and London-based economist Ali Metwally both caution against assuming an immediate return to sub-EGP 48 pre-war baselines.

“The decline of the USD below EGP 50 does not mean we have returned to pre-war levels, nor that we are necessarily heading there. However, it remains an important and positive development that reflects improving market sentiment following a partial easing of regional geopolitical risks,” Metwally points out. He notes that high real interest rates continue to bolster the attractiveness of local debt, which, alongside sustained geopolitical calm and stable energy prices, could eventually anchor the exchange rate within the EGP 49-50 territory.

THE BIG STORY ABROAD-

🌐 Still dominating the front pages today are the terms included in the 14-point agreement between the US and Iran, published in full by CNN — though yet to be officially released by either government. The main terms include reopening the Strait of Hormuz, confirmation that Iran would never build a nuclear weapon, and an immediate and permanent end to all military operations in Lebanon. The final agreement will be approved through a binding resolution of the UN Security Council. The MoU also includes a USD 300 bn development fund designed to jumpstart investment in Iran.

^^Read more on: CNN, Reuters, and The Guardian.

MEANWHILE- Following a fresh wave of Israeli attacks on southern Lebanon earlier today — and despite criticism from US President Donald Trump of Israel’s actions in the country — the world leaders present at the G7 Summit in France issued a joint statement calling for an “immediate robust ceasefire” in Lebanon.

^^Read more on: BBC, Reuters, and the Guardian.

IN OTHER NEWS- The Federal Reserve System is set to reveal its latest interest rate decision today as policymakers navigate an economy grappling with its highest inflation levels in three years. The announcement marks the first rate decision since Kevin Warsh, a Trump nominee, began his four-year term as Fed chair last month — with markets anticipating a near-certain hold on the benchmark rate. The decision also comes at a pivotal moment for the US economy, with the US-Iran agreement offering a potential boost to inflation relief through easing energy price pressures.

^^Read more on: Reuters, CNBC, ABC News, and NBC News.

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

• The gov’t is delaying its promised overhaul of the solidarity contribution companies pay to help fund the Universal Health Ins. system. Finance Minister Ahmed Kouchouk has asked the House to defer plans to shift the levy’s calculation from gross revenues to net income, citing the heavy human development spending in the FY 2026/27 budget;
• Egypt’s automotive market cooled in April, falling to 15.3k units from 17.8k in March as it digested two months of pulled-forward demand. Buyers had front-loaded purchases through February and March to beat price hikes and Red Sea shipping disruptions, leaving April to absorb the correction;
• Osool Securities Brokerage plans on upping its stake in real estate blue-chip Talaat Moustafa Group. The brokerage firm’s current position in TMG is less than 5%. Neither the size of the planned increase nor its timeline was disclosed;
• Fintech platform Valu secured a EGP 600 mn loan from the European Bank for Reconstruction and Development to finance household purchases of energy-efficient and renewable technologies. The facility aims to drive retail adoption of solar power and electric mobility.

☀️ TOMORROW’S WEATHER- Cairo’s weather remains pleasantly warm tomorrow, with a high of 35°C and a low of 24°C. Meanwhile, it’s cooler on the coast, with highs of 29°C and breezier lows of 21°C, according to our favorite weather app.