Why did remittances from Egyptians abroad rise during the war?
Egyptian workers abroad sent home record levels of remittances in March, although workers in the Gulf were living under Iranian missile attacks targeting US bases and interests.
Remittances, ranging between $3 billion and $4 billion a month in 2025, climbed to $5.5 billion in March. Analysts attribute the jump to anxiety over the war in the Gulf. In times of danger, Egyptian expats in the Gulf see no safer place for their money than accounts held by family members back home.
What’s behind the spike?
Walaa Ahmed, head of research at Prime Securities, told Al Manassa that the noticeable rise in remittances from Egyptians abroad was a reaction to the uncertainty that prevailed in Gulf countries at the time.
In retaliation for the US–Israeli war on Iran that began in late February, Tehran launched missile strikes across the Gulf. Although US military bases were the primary targets, airports, seaports, and other facilities were also hit.
Waves of Iranian bombardment caused panic among workers in the Gulf, particularly as air traffic was disrupted. Conditions began to stabilize only after the US–Iran ceasefire was announced in April, which later paved the way for the resumption of normal air traffic.
Fearing economic and financial instability in the region, many workers transferred their savings and salaries to Egypt as soon as they received them, Ahmed told Al Manassa, noting that the Gulf employs about five million Egyptians, making it by far the country’s largest overseas labor market.
Ahmed added that the rise of the dollar against the pound in March increased the appeal of sending money home. Salma Taha, head of research at Al Naeem Brokerage, agreed, telling Al Manassa that the flexible exchange-rate policy adopted by the Central Bank of Egypt directly helped restore foreign-currency inflows and discouraged Egyptians abroad from using the parallel market to transfer funds.
The dollar reached unprecedented levels in March, surpassing 54 Egyptian pounds for the first time, driven by a rapid exit of foreign investment from Egyptian government debt.
Esraa Ahmed, a macroeconomics analyst at Thundr Securities, believes another reason for the surge could be the concern for relatives in Egypt as the war pushed up fuel prices and inflation pains.
An unprecedented shock
Ahmed Mohamed, an Egyptian employee at Dubai Airport, explained to Al Manassa how Egyptians experienced a period of uncertainty that heightened their sense of risk. “At the time, we didn’t know whether we’d be staying or heading back to Egypt, so we started sending a larger share of our money home,” he said.
Mohamed said the growing ease of transferring money through new digital services also encouraged workers to move funds quickly. “But the main motivation was the desire to keep savings close to the family and in the country where we plan to live permanently, in case developments affect our work or residency plans in the coming period,” he added.
In addition to the war, many Egyptians working in Saudi Arabia were already feeling uneasy because of new labor regulations, said Mohamed Shaaban, an Egyptian worker in the kingdom.
Saudi Arabia has announced that an exemption from fees imposed on foreign workers, introduced in 2020, will expire at the start of 2027. The move has raised concerns among some expatriate workers that higher labor costs could lead to layoffs.
“If the decision is implemented, there’s a good chance many small businesses will shut down, increasing pressure on workers,” Shaaban said.
The levy amounts to 9,600 Saudi riyals ($2,560) a year for each foreign employee at companies where Saudi nationals account for less than 50% of the workforce.
An opportunity to protect the pound
Analysts do not expect this surge to continue now that conditions in the Gulf have stabilized. Evidence can already be seen in April remittances, which fell back to $4.3 billion. However, they say the episode highlights the role of Egyptians abroad as a buffer against shocks caused by volatile foreign capital flows.
At a time when large amounts of foreign investment exited Egyptian debt instruments, contributing to pressure on the pound, remittances were flowing in the opposite direction into Egypt, helping limit the local currency’s decline against the dollar.
Salma Taha said remittances from Egyptians abroad have helped boost the supply of dollars in the banking system in recent months, particularly during periods when foreign investors were pulling money out of emerging markets.
Esraa Ahmed went further, saying that without remittances, the Egyptian pound could have fallen to even lower levels during the sell-off of so-called hot money.
Egypt’s foreign currency reserves rose to $53.134 billion in May, an increase of about $388 million since February, despite economic pressures and the fallout from the US war on Iran.
Beyond periods of crisis, analysts expect remittances to play a key role in protecting Egypt’s foreign currency reserves in the coming years. They say the Central Bank of Egypt’s success in eliminating the black market has helped channel more foreign-currency inflows through the formal banking system rather than outside it.