The U.S. dollar is currently experiencing a significant decline, reaching its lowest levels in the past three years. This decline is a result of the economic policies followed by the U.S. administration, leading to a period of instability in global markets. While the world monitors these developments, the key question for Egyptians remains: Can the Egyptian pound benefit from these changes?

Factors Affecting the Egyptian Pound

Despite the decline in the U.S. dollar, the Egyptian pound is not directly influenced by the movements of the dollar. Local economic factors play the primary role in determining the exchange rate. Some of the key factors include:

Egypt’s Revenue Stream: The flow of foreign currencies into Egypt is crucial in supporting the pound.Domestic and Foreign Debt: Egypt’s financial obligations are a significant challenge to exchange rate stability.Internal Economic Conditions: Economic growth, unemployment, inflation, and the business environment all have a substantial impact on the Egyptian pound.

Potential Opportunities for the Egyptian Pound

Although the pound is not directly affected by the decline of the dollar, there is an opportunity for it to improve if emerging markets experience capital inflows due to capital flight from “Wall Street” caused by political and economic turmoil in the United States. Should this scenario unfold, the Egyptian pound could benefit from the influx of dollars into the Egyptian market, leading to a possible appreciation.

Current Predictions

Some global forecasts show positive signs for the Egyptian pound to some extent. Major international institutions have adjusted their projections regarding the pound’s performance. For instance, the International Monetary Fund (IMF) updated its estimates in favor of the Egyptian pound, predicting an average exchange rate of 49.9 against the dollar for the current fiscal year, compared to its previous forecast of 50.6. It also projected that the pound could reach 52.3 to the dollar in the next fiscal year, as opposed to its earlier estimate of 54.9. This adjustment reflects a relatively improved outlook for the pound amidst the decline of the dollar.

However, some institutions remain cautious in their forecasts for the future of the Egyptian pound. For example, Standard & Poor’s has predicted that the exchange rate in Egypt will average 52.5 pounds to the dollar in the next fiscal year, and it could reach 54 pounds by the end of the year, compared to previous expectations of 51 pounds by the end of June.

 Between optimistic and cautious forecasts, the question of whether the Egyptian pound can benefit from the decline of the U.S. dollar remains open. Ultimately, domestic economic challenges, including debt and revenue generation, remain the most significant factors affecting the future of the Egyptian pound. Nevertheless, there is still an opportunity if Egypt succeeds in attracting foreign capital inflows from volatile global markets.