The US dollar climbed further against the Egyptian pound on Wednesday, extending a weekly rally to trade at roughly 51.18 pounds as foreign investor departures from local debt instruments coincided with market unease over US regulatory scrutiny of Banque Misr’s United Arab Emirates branch regarding alleged dealings with Iran.
The exchange rate rose from 50.59 pounds per dollar recorded on Aug. 30, reflecting immediate market sensitivity to geopolitical and financial policy signals.
The currency movement followed comments from US Treasury Secretary Scott Bessent, who told Reuters on Sunday that developments involving Banque Misr in the UAE could lead to steps aimed at entirely cutting off a financial institution from the dollar-based global payments network.
Bessent subsequently clarified that Washington does not seek to widen punitive actions to encompass Egypt itself.
“We did not impose sanctions because we did not want the measures to extend to the parent Banque Misr,” Bessent stated on Tuesday.
The Treasury secretary’s statements coincided with an uptick in the dollar’s value against the pound, driven by foreign portfolio realignments across Egyptian sovereign debt.
Walaa Ahmed, head of research at Prime Securities, told Al Manassa that the dollar’s appreciation reflects “foreign outflows from government debt instruments, amid anxiety provoked by recent statements touching on US economic and fiscal policy.”
Foreign institutional investors ended Wednesday’s secondary market bond trading on the Egyptian Exchange as net sellers of approximately 28.5 billion pounds, even as they posted net purchases of 14.3 billion pounds in Treasury bills.
Foreign capital maintains substantial exposure in Egypt’s sovereign debt issuances, meaning portfolio exits exert considerable pressure on dollar demand and the broader exchange rate. Latest figures from the Central Bank of Egypt place aggregate foreign holdings in Egyptian Treasury bills at approximately 1.9 trillion pounds.
Despite the pressure, Egypt's financial system demonstrated greater resilience in absorbing the capital movements than in previous cycles, supported by historic central bank foreign currency reserves that reached $56.2 billion at the end of July.
The record reserve cushion reinforces currency market stability, equipping the monetary authority with substantial foreign exchange liquidity to counter spikes in dollar demand and withstand short-term portfolio divestments.
