Egypt’s Dollar Rate Forecast: 45 or 55 Pounds in 2026?

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Tourism as a Catalyst for Economic Growth: Insights and Trends

In a recent analysis by The Economist, tourism has been highlighted as a pivotal sector driving growth in several economies. This insight underscores the enduring importance of tourism, not only as a temporary economic booster but as a foundational pillar supporting sustainable development and employment.

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Trends Shaping the Future

What factors will determine whether the Egyptian pound stabilizes at 45 EGP or devalues to 55 EGP in 2026?

Egypt’s Dollar Rate Forecast: 45 or 55 Pounds in 2026?

The Egyptian pound (EGP) has been under critically important pressure in recent years, leading to a dramatic devaluation against the US dollar. As we reach February 1st, 2026, the crucial question on the minds of investors, businesses, and citizens alike is: will the dollar rate stabilize around 45 EGP, or will it continue its ascent towards 55 EGP? This article dives deep into the factors influencing the EGP/USD exchange rate and provides a realistic outlook for the remainder of the year.

Understanding the Recent Devaluation & Current Exchange Rate

Before forecasting, it’s vital to understand the context. Since 2022, Egypt has experienced multiple devaluations of the pound, largely driven by:

* Foreign Currency shortage: A persistent shortage of US dollars has plagued the Egyptian economy, stemming from reduced tourism revenue (impacted by global events), lower remittances from Egyptians abroad, and a widening trade deficit.

* IMF Agreements & Conditions: While the International Monetary Fund (IMF) has provided crucial financial assistance, these loans come with stringent conditions, including a flexible exchange rate policy. This means allowing the market to largely determine the value of the pound.

* geopolitical Risks: Regional instability and global economic uncertainty contribute to investor risk aversion, impacting capital inflows into egypt.

* Inflationary Pressures: High inflation erodes the purchasing power of the pound, further weakening its value.

as of today, February 1st, 2026, the official exchange rate hovers around 48 EGP to 1 USD. However, a significant parallel market exists, where rates are considerably higher, often exceeding 52 EGP. This disparity highlights the ongoing challenges in managing the currency.

Key Factors Influencing the 2026 Forecast

Several factors will dictate whether the EGP stabilizes, strengthens, or weakens further in 2026.

1. IMF Funding & Subsequent Tranches: The success of Egypt’s current IMF program is paramount. Timely disbursement of subsequent tranches relies on meeting pre-agreed reform targets. Failure to do so could trigger a renewed currency crisis.

2. Suez Canal Revenue: The Suez Canal remains a vital source of foreign currency. Increased global trade and efficient canal operations are crucial for boosting dollar inflows. Recent expansions and modernization efforts are expected to contribute positively, but geopolitical risks remain a concern.

3. Tourism sector Recovery: A sustained recovery in the tourism sector is essential. Attracting tourists requires stability, security, and competitive pricing. The government’s efforts to diversify tourism offerings and promote Egypt as a safe destination will be key.

4. Remittances from Egyptians Abroad: Remittances are a significant source of foreign currency. economic conditions in host countries (like saudi Arabia, the UAE, and Europe) and government policies aimed at encouraging remittances will play a role.

5. Foreign Direct Investment (FDI): Attracting FDI is crucial for long-term economic stability. Streamlining investment procedures, improving the business climate, and offering attractive incentives are vital. The government’s focus on renewable energy projects and infrastructure development could attract significant FDI.

6. Central Bank of Egypt (CBE) Policies: The CBE’s monetary policy, including interest rate adjustments and reserve management, will influence the exchange rate. Maintaining a tight monetary policy to control inflation is likely, but this could also dampen economic growth.

Scenario Analysis: 45 EGP vs. 55 EGP

Let’s examine two potential scenarios:

Scenario 1: Stabilization Around 45 EGP

This scenario requires a confluence of positive developments:

* Accomplished IMF Program: Egypt consistently meets IMF targets,unlocking further funding.

* Strong Tourism Recovery: Tourist arrivals exceed pre-pandemic levels, generating considerable dollar inflows.

* Increased Remittances: Remittances from Egyptians abroad increase due to improved economic conditions in host countries.

* Moderate FDI inflows: Significant FDI is attracted to key sectors like renewable energy and infrastructure.

* Effective CBE Policies: The CBE effectively manages inflation and maintains a stable monetary policy.

Probability: 20-25%. This scenario is optimistic and requires significant positive momentum.

Scenario 2: Continued Depreciation Towards 55 EGP

This scenario is more likely given the current economic challenges:

* IMF Program Stalls: Egypt struggles to meet IMF targets, delaying or halting further funding.

* Slow Tourism Recovery: Geopolitical risks or economic downturns in key source markets hinder tourism growth.

* Remittance Decline: Economic slowdowns in host countries lead to lower remittances.

* Limited FDI: The business climate remains challenging, deterring significant FDI inflows.

* persistent inflation: Inflation remains high,eroding the value of the pound.

Probability: 65-70%. This scenario reflects the ongoing economic vulnerabilities and the challenges in attracting sufficient foreign currency.

Scenario 3: A Middle Ground – 50-52 EGP

This scenario represents a partial stabilization, with the pound depreciating but at a slower pace. It assumes some positive developments, but also acknowledges the persistent challenges.

Probability: 10-15%. This is a plausible outcome, representing