CBE Governor explains reasons for Egyptian pound’s historic drop against US dollar

The Egyptian pound’s rate of 55.35 per US dollar means buyers needed 55.35 Egyptian pounds to obtain one dollar. It shows the pound reached its weakest recorded level against the dollar. This can make imported goods and dollar payments more expensive in pounds.

The figure was historic because it exceeded the previous record of 54.75 pounds per dollar. That record was reached last April after US-Iranian military escalation. Under Egypt’s flexible exchange-rate policy, the currency moves as economic conditions and regional or global events change. Greater demand for dollars can push the rate higher, but the article names no single immediate cause.

At the Egypt 2026 Forum, Governor Hassan Abdalla called these fluctuations normal under current conditions. He urged the public not to panic and said a fixed rate during changing conditions would be more concerning. The Egyptian banking system, he added, is capable of handling rapid international and regional developments.

The pound’s latest decline was 0.60 Egyptian pounds per dollar, moving from its previous record low of 54.75 to 55.35. That equals roughly 1.1% weaker against the dollar, using the earlier rate as the base. This matters because each dollar now costs more pounds.

The concrete comparison comes from commercial bank trading on Thursday. The new rate exceeded the earlier peak, reached last April after the US-Iranian military escalation. Under the Central Bank of Egypt’s flexible policy, the exchange rate changes as regional and global economic conditions shift, rather than staying fixed.

Governor Hassan Abdalla said such movement is normal in current circumstances and urged the public not to panic. He also said a fixed rate despite changing conditions would be more concerning. For households and businesses needing dollars, the higher rate can raise import and foreign-payment costs, while the banking system’s stated resilience supports its ability to manage further volatility.

When the pound loses value against the dollar, each dollar costs more pounds. Imported goods, fuel, medicine, and foreign-made inputs usually become more expensive. That can push up prices broadly and reduce what Egyptians can buy with the same income.

For example, a $100 imported item cost LE5,475 at LE54.75 per dollar, before other costs. At LE55.35, it costs LE5,535, an extra LE60 before taxes, shipping, or retailer margins. Businesses may pass these higher costs to shoppers, while people holding pound savings lose some purchasing power.

The pound closed at LE55.35 per dollar Thursday, surpassing the previous record of LE54.75 reached last April. Governor Hassan Abdalla said movements reflect changing regional and global conditions and defended flexible rates. Going forward, households may need tighter budgets, while the impact depends on inflation, wages, and future exchange-rate movements.

Regional wars, global financial shocks, and changing trade conditions can alter Egypt’s foreign-currency inflows. They can affect tourism, Suez Canal earnings, remittances, exports, investment, and borrowing, making dollars scarcer and pressuring the pound.

A clear example came after the US-Iranian military escalation: the pound reached LE54.75 per dollar last April. More broadly, such shocks can disrupt travel, delay trade receipts, or encourage investors to move money elsewhere. This reduces available dollars while demand remains high.

The pound later closed at 55.35 per dollar in commercial-bank trading on Thursday, a new record low. Governor Hassan Abdalla says the rate should move with changing conditions rather than stay fixed. He also says Egypt’s banking system can handle rapid international and regional developments, while urging people to avoid unwarranted anxiety.

A flexible exchange rate lets the pound rise or fall as economic conditions change, rather than forcing one official value. The CBE says this matters because regional and global events can quickly affect currencies and foreign-currency flows. It absorbs pressure through the market instead of hiding it behind an unchanged official price.

On Thursday, the pound closed at 55.35 per dollar, surpassing its previous record of 54.75 last April. That movement reflects changing pressures rather than forcing the bank to defend an unrealistic rate. Defending such a rate could drain available foreign currency.

Abdalla said fluctuations are normal under current circumstances and warned that a fixed rate could be more concerning. The banking system, he said, can handle rapid international and regional developments. For the public, flexibility means accepting short-term changes while the bank responds to conditions instead of promising artificial stability.

Egypt’s central bank can influence exchange rates through policy choices, while commercial banks transmit conditions through daily currency trading. A flexible approach lets the pound respond to changing demand, supply, and economic pressures instead of keeping one fixed value. This matters because a fixed rate may ignore rapid regional and global changes.

A clear example came Thursday, when the pound closed at 55.35 per US dollar in commercial bank trading. That surpassed the previous historic peak of LE 54.75, reached last April after a US-Iranian military escalation. The shift shows banks can update quoted rates as conditions change, while the central bank guides the broader policy framework.

Currently, Governor Hassan Abdalla says these movements are normal under Egypt’s circumstances. He says people should consider regional and global developments, rather than fear every fluctuation. The CBE stresses that the banking system can handle rapid international and regional developments. Flexibility therefore remains central to Egypt’s response.

A currency’s value is set by supply and demand in the foreign-exchange market. Demand rises when people want a currency for trade, investment, or payments; supply rises when holders sell it. Economic conditions, interest rates, inflation, trade flows, and confidence can shift both sides.

Egypt shows this process clearly. The pound closed at 55.35 per dollar, surpassing its previous record of 54.75. CBE Governor Hassan Abdalla said its flexible rate moves dynamically as regional and global conditions change. If demand for dollars increases, or fewer dollars enter Egypt, the pound can weaken.

Abdalla said such fluctuations are normal and warned that a fixed rate could be more concerning when conditions change. He also stressed that Egypt’s banking system can handle rapid international and regional developments. For households and businesses, movements affect import costs, travel, debt payments, and savings. Flexibility can reflect reality more accurately, but it may increase uncertainty.