Standard & Poor’s Global Ratings projected the Egyptian pound would weaken to 52 Egyptian pounds per dollar by 2027, compared to expectations of 49.2 by 2026, with further declines to 55 by 2028 and 57 by 2029, according to a report released in October 2026. This follows a 12% loss in value during the U.S.-Iran war in the region.
S&P forecasts Egyptian pound depreciation and inflation slowdown
Standard & Poor’s forecasted the Egyptian pound’s depreciation amid persistent regional instability and inflationary pressures.
Inflation projections contrast with Ministry of Finance assertions
The agency also anticipated a slowdown in inflation, with Egypt’s annual rate falling to 12.9% in 2027 from 13.3% expected in 2026, before declining to 10.8% in 2028 and 8.6% in 2029. However, this projection contrasts with the Ministry of Finance’s assertion that the economy had “demonstrated resilience” in absorbing regional shocks. The central bank’s decision to maintain interest rates at 19% for deposits and 20% for lending—its fifth hold in September—highlighted efforts to curb inflation while managing currency volatility.
Fitch Ratings projected inflation to rise to 12.3% in the 2027 fiscal year, up from 11.6% in 2026, due to rising global energy and commodity prices, according to source 3. The agency also noted that while the central bank’s monetary policy and exchange rate flexibility would help temper inflation, temporary spikes were expected.
US-Iran war triggers financial outflows from Egypt
The war between the U.S. and Iran in early 2026 triggered a significant outflow from Egypt’s financial markets, according to Standard & Poor’s. Despite this, the central bank avoided intervention, allowing the currency to absorb much of the shock. By late 2026, the pound had recovered most of its losses, supported by improved foreign exchange reserves and increased tourism revenue. However, the agency warned that sustained geopolitical tensions could reintroduce risks to the currency’s stability.
Resilience and Structural Challenges
While Standard & Poor’s emphasized the pound’s expected decline, other reports highlighted Egypt’s economic resilience. The Ministry of Finance cited a 5.1% GDP growth in the 2025-2026 fiscal year, driven by manufacturing, communications, and information technology sectors. Foreign exchange reserves rose to 54.4 billion dollars by August 2026, bolstered by remittances, Suez Canal revenues, and tourism.
Did You Know? Egypt’s foreign exchange reserves increased by 5.5 billion dollars during the first eight months of 2026, reaching 54.4 billion dollars, according to Fitch Ratings. This growth was driven by remittances, tourism, and increased Suez Canal revenues due to shipping being diverted away from the Strait of Hormuz because of the Iran war.
Additional Insight: Egypt’s foreign exchange reserves reached 54.4 billion dollars in August 2026, with the risk premium for the country dropping to its lowest level since 2014, per JPMorgan Chase & Co. data, according to source 3.
What are the projections for the Egyptian pound?
What is the projected exchange rate for the Egyptian pound by 2027?
Standard & Poor’s Global Ratings projected the Egyptian pound would weaken to 52 Egyptian pounds per dollar by 2027, compared to expectations of 49.2 by 2026.
How has the U.S.-Iran war impacted Egypt’s economy?
The conflict led to a 12% depreciation of the Egyptian pound and a significant outflow from Egypt’s financial markets. However, the economy absorbed these shocks through increased tourism and Suez Canal revenues, according to reports.
What are the key risks to Egypt’s currency stability?
Risks include sustained geopolitical tensions, rising debt service costs (projected at 52% of government revenue by 2028), and potential disruptions to foreign exchange inflows, as highlighted by Fitch Ratings.
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