Cairo, Egypt – Economist Hani Tawfiq has voiced criticism regarding the recent decline in the dollar’s value, attributing it to indirect foreign investment in Egyptian treasury bills and bonds. This comes as the egyptian pound continues its ascent against the dollar, reaching a nine-month high.
Tawfiq, in a post on his official Facebook page on Wednesday, August 6, 2025, questioned the reliance on “hot money”-foreign investment in debt tools-to lower the dollar’s exchange rate. He suggested a shift towards strengthening the egyptian pound through more sustainable economic strategies. According to Tawfiq, approximately $40 billion has been invested through these debt tools.
“Is it not time to abandon the idea of lowering the dollar by hot money-foreign investment in debt tools-and instead start strengthening the pound?” Tawfiq wrote. He advocated for policies that stimulate foreign direct investment, increase state revenues, boost exports, and reduce national debt.
The exchange rate has been steadily improving as July, with the dollar currently trading at 48.4 Egyptian pounds for purchase and 48.5 pounds for sale in banks. This marks a notable recovery from the record high of 51.7 pounds reached in april, a period influenced by concerns over potential American customs duties and the partial withdrawal of foreign investors from emerging markets, including Egypt.
Bankers speaking to Masrawy attribute the dollar’s decline to increased foreign exchange inflows, driven by a thriving tourism season, remittances from Egyptians working abroad, and the aforementioned indirect investment flows. The tourism sector in Egypt has seen a resurgence, especially in popular destinations like Sharm el-Sheikh and Hurghada.
The Central Bank of Egypt recently reported a 69.6% increase in remittances from Egyptians working abroad, reaching $32.8 billion during the first 11 months of the fiscal year 2024-2025, compared to $19.4 billion during the same period last year. These remittances play a crucial role in bolstering Egypt’s foreign currency reserves.
Over the first nine months of the previous fiscal year, Egypt generated approximately $81 billion from five key foreign cash sources: tourism, exports, remittances from egyptians abroad, Suez Canal revenues, and foreign direct investment. The Suez Canal, a vital waterway for global trade, contributed considerably to these earnings, generating over $9 billion in revenue during that period.
Manal al-Masry reported this story from Cairo.
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