Why is Egypt jumping into Houthi war? First, follow the money.

Egypt’s parliament gave President Abdel-Fattah el-Sisi authority to take “necessary measures” to help defend Saudi Arabia against Houthi missiles and drones. The authorization followed two postponements and unusual debate over the mission’s cost, duration and troop numbers. It matters because Egypt is trying to protect a vital relationship without repeating its costly intervention in Yemen’s past civil war.

Sisi describes the mission as defensive and says it “does not include an attack on Yemen.” Egypt’s foreign minister, Badr Abdelatty, also says political solutions must be explored. These statements separate protection of Saudi territory from an offensive campaign against the Houthis.

The approach gives Riyadh visible support while limiting Egypt’s commitment. Parliament’s authorization creates room for military assistance, but the undisclosed details leave its scale uncertain. Egypt also needs to keep channels open with the Houthis because attacks threaten Red Sea shipping and the Suez Canal, a major source of foreign currency.

The Houthis are an Iran-aligned group that controls much of Yemen. They have spent weeks firing missiles and drones at Saudi airports and fossil-fuel infrastructure. Their attacks matter beyond Saudi Arabia because they also threaten the Red Sea route used by ships traveling toward Egypt’s Suez Canal.

The article links the Red Sea attacks to solidarity with Gaza. It also reports that the Houthis declared a blockade on Saudi shipping in July, then seized the Yemeni ports of Mocha and the island of Mayun in September. Those moves gave them a grip on the Bab al-Mandeb Strait, the narrow gateway at the Red Sea’s southern end.

The article does not provide a broader statement of the Houthis’ political aims. It does show their attacks have forced ships around Africa, reducing Suez Canal income. Egypt is therefore trying to restrain escalation through channels with the group, even as it remains formally aligned with the Saudi-led coalition.

Egypt relies heavily on deposits from Gulf states to support its foreign-currency reserves. Saudi Arabia keeps about $10.3 billion at Egypt’s central bank. When Kuwait’s and Qatar’s accounts are added, the total reaches roughly $18 billion, close to one-third of Egypt’s $57 billion in reserves.

These deposits provide dollars that Egypt needs for major obligations. The country imports large quantities of wheat, buys increasing amounts of fuel abroad and pays billions in interest to foreign lenders. Those bills are dollar-denominated, while Egypt does not earn enough foreign currency on its own to cover them comfortably.

The deposits make Gulf relationships economically significant, especially during a currency and debt crisis. The article gives no public indication that Riyadh directly tied its deposits to military support. Still, the size of the funds means Egypt must consider how its decisions could affect a crucial financial backer.

Saudi financial support influences Egypt because Cairo urgently needs foreign currency. Saudi deposits help support Egypt’s reserves, alongside funds from Kuwait and Qatar. Egypt uses dollars to import wheat and fuel and to pay interest and repayments to foreign lenders. A government short of dollars has little room to alienate a major financial backer.

The pressure is visible in the numbers. Egypt’s pound has reached a record low of 56 to the dollar. Debt service takes about 64% of this year’s budget, while interest payments alone cost more than spending on education, health, wages and subsidies combined. These conditions make financial relationships central to security decisions.

The article does not say Riyadh explicitly conditioned its deposits on military help. Egypt may still anticipate the consequences of disappointing Saudi Arabia. Its support can therefore be shaped by dependence, even without a direct demand, because losing confidence or financial backing would worsen its economic vulnerability.

If Houthi attacks keep ships away from the Suez Canal, Egypt loses one of its most important sources of foreign currency. The canal carries about 12% of world trade. Its income helps a country that must pay for imported wheat and fuel while servicing heavy dollar debt. Less traffic would deepen pressure on reserves and the wider economy.

The recent impact is already clear. Canal revenue fell from $10.2 billion in 2023 to about $4 billion in 2024 after attacks on Red Sea shipping forced vessels to sail around Africa. The canal authority hopes to earn $8 billion in fiscal year 2026/27, but that target assumes calmer Red Sea conditions.

That assumption looks weak in the article’s account. The Houthis declared a blockade on Saudi shipping and seized Mocha and Mayun, gaining leverage near Bab al-Mandeb. Egypt has opened channels to press them to keep the strait open, but its leverage is limited.

Egypt is trying to reassure Saudi Arabia without becoming a full combatant in Yemen. Parliament authorized Sisi to take necessary defensive measures, but Sisi says the mission excludes an attack on Yemen. Cairo’s official language presents Saudi security as part of Egypt’s national security while avoiding a concrete pledge to wage war against the Houthis.

Egypt’s foreign minister, Badr Abdelatty, says all opportunities for political solutions must be explored. The government also reportedly set up a crisis unit and opened channels to the Houthis. An Egyptian source said those contacts aimed to prevent escalation and keep the Bab al-Mandeb Strait open to shipping.

This is a narrow balancing act. Egypt remains formally part of the Saudi-led coalition supporting Yemen’s internationally recognized government, which limits its diplomatic flexibility. Yet Cairo needs the canal protected and wants to avoid another long, expensive Yemen entanglement. Its support is therefore designed to be visible, defensive and restrained.

Foreign-currency reserves are holdings of overseas currencies that a country can use for international payments. In Egypt’s case, the article describes deposits at the central bank as part of those reserves. They provide access to dollars when Egyptian income does not generate enough foreign currency to meet national needs.

Egypt is one of the world’s biggest wheat importers and increasingly buys fuel from abroad. It also owes billions in interest to foreign lenders. Wheat, fuel and debt payments require dollars, so reserves help the government pay suppliers and creditors. Deposits from Saudi Arabia, Kuwait and Qatar contribute about $18 billion to the total.

These reserves are essential because Egypt faces a weak currency and very high debt costs. Its reserves total about $57 billion, while its pound has fallen to 56 per dollar. If foreign currency becomes harder to obtain, imports and debt payments become more difficult, increasing pressure on the economy and government budget.