The fluctuating value of currency is a constant reality in the global economy, and on Friday, November 28, 2025, Egypt found itself at the heart of this dynamic. This report delves into the specifics of the dollar’s value against the Egyptian pound on that particular day, examining the factors that shaped it and the implications for the nation.

We’ll unpack the context surrounding this pivotal date, exploring the economic landscape leading up to it, the “new move” that triggered the shifts, and the resulting impact on citizens and businesses. From government responses to media coverage, this analysis provides a comprehensive look at a significant moment in Egypt’s financial history.

Contextualizing the Date

Let’s rewind and set the scene for November 28, 2025, in Egypt. This was a pivotal time, shaped by a confluence of domestic reforms and global economic pressures. Understanding the context requires a look back at the years leading up to this date, examining key economic events, the prevailing climate, and the external factors that influenced the value of the Egyptian pound.

Timeline of Significant Economic Events Leading Up to November 28, 2025

Egypt had been on a journey of economic reform. Several key events and policies played a crucial role in shaping the economic landscape leading up to November 2025. These events had a direct impact on the value of the Egyptian pound against the dollar.

• 2016: The Floatation of the Egyptian Pound. In November 2016, Egypt floated its currency, a crucial step in securing a $12 billion loan from the International Monetary Fund (IMF). This led to a significant devaluation of the pound, initially impacting inflation but aimed at attracting foreign investment and stabilizing the economy. The initial devaluation saw the pound plummet from around 8.8 EGP per USD to approximately 18 EGP per USD.

• 2017-2020: Implementation of Austerity Measures and Economic Reforms. Following the floatation, the Egyptian government implemented various austerity measures, including subsidy cuts on fuel and electricity, as well as the introduction of a value-added tax (VAT). These measures, while painful, were designed to reduce the budget deficit and control inflation. Simultaneously, efforts were made to improve the business environment to attract foreign investment.
• 2020-2022: The Impact of the COVID-19 Pandemic. The global pandemic brought significant challenges. Tourism, a vital sector for Egypt, was severely impacted. Remittances from Egyptians working abroad, another key source of foreign currency, also faced disruptions. The government implemented fiscal stimulus packages to mitigate the economic impact, increasing public debt.
• 2023-Early 2025: Geopolitical Instability and Inflationary Pressures. The war in Ukraine and other geopolitical tensions added further pressure. Global commodity prices, including food and fuel, surged, fueling inflation. The Egyptian pound faced renewed pressure, and the government had to navigate these challenges.

Prevailing Economic Climate in Egypt Just Before November 28, 2025

The economic climate just before November 28, 2025, was a complex mix of challenges and opportunities. Egypt was attempting to balance economic growth with fiscal responsibility while grappling with external pressures.

• High Inflation: Inflation remained a persistent concern. The devaluation of the pound, coupled with rising global prices, had a significant impact on the cost of living for Egyptians. The government was trying to control inflation through monetary policy, such as raising interest rates, but this also affected economic growth.
• Public Debt: The government’s public debt had increased due to borrowing to finance infrastructure projects and mitigate the economic impact of the pandemic and global crises. Managing this debt and ensuring its sustainability was a priority.
• Foreign Investment: Attracting foreign investment was crucial for economic growth and stability. The government was working to improve the investment climate, but challenges remained, including bureaucratic hurdles and currency fluctuations.
• Currency Fluctuations: The value of the Egyptian pound was subject to volatility, influenced by factors such as global economic conditions, investor sentiment, and government policies. This volatility impacted businesses and individuals alike.

Role of Global Economic Factors Influencing Egypt’s Economy During That Period

Egypt’s economy is deeply intertwined with the global economy. Several global factors exerted significant influence in the lead-up to November 2025.

• Global Commodity Prices: The prices of oil, wheat, and other essential commodities directly impacted Egypt. Rising prices increased import costs, contributing to inflation and putting pressure on the Egyptian pound. For example, a surge in global wheat prices, a staple food in Egypt, would directly increase the cost of bread, affecting household budgets.
• Interest Rates in Developed Economies: Interest rate hikes by central banks in developed countries, like the US Federal Reserve, made investments in these economies more attractive, potentially leading to capital outflows from emerging markets like Egypt. This could weaken the Egyptian pound.
• Geopolitical Instability: Conflicts and political instability in various parts of the world disrupted supply chains, increased uncertainty, and affected investor confidence. This, in turn, impacted foreign investment flows and the value of the Egyptian pound. For example, the war in Ukraine disrupted wheat supply chains, leading to higher prices, which affected Egypt, a major wheat importer.
• Global Economic Growth: The overall health of the global economy had a significant impact. Strong global growth generally supports demand for Egyptian exports and attracts foreign investment, while a global slowdown can have the opposite effect.

Understanding “Officially, After the New Move…”

The phrase “Officially, After the New Move…” signals a significant change in Egypt’s financial landscape. It indicates a shift in policy that directly impacts the value of the Egyptian pound against the US dollar. Understanding this “new move” is crucial for interpreting the exchange rate information presented. This section will delve into the specifics of this policy change, providing context for the exchange rate figures.

The “New Move” Explained

The “new move” most likely refers to a significant intervention in the Egyptian foreign exchange market. These interventions are often implemented by the Central Bank of Egypt (CBE).The “new move” could involve several strategies, but a common one is a devaluation of the Egyptian pound.

Initiator of the “New Move”

The primary actor initiating such significant financial policies is the Central Bank of Egypt (CBE). The CBE is responsible for:* Formulating and implementing monetary policy.

• Managing the country’s foreign exchange reserves.
• Overseeing the banking system.

Therefore, any “new move” concerning the exchange rate would originate from the CBE.

Objectives of the “New Move”

The publicly stated objectives of such a move, such as a currency devaluation, typically include:* Boosting Exports: A weaker Egyptian pound makes Egyptian goods and services cheaper for foreign buyers, potentially increasing exports.

Attracting Foreign Investment

A more competitive exchange rate can make Egypt a more attractive destination for foreign investment.

Reducing the Trade Deficit

By making imports more expensive, a devaluation can help reduce the gap between imports and exports.

Addressing Currency Shortages

In some instances, devaluation is a measure to try and free up currency in the market, making it more accessible.These objectives are often intertwined, aiming to stabilize the economy and foster sustainable growth.

“A weaker Egyptian pound can make Egyptian goods and services cheaper for foreign buyers, potentially increasing exports.”

The Dollar’s Value Pre-“New Move”

Before we delve into the specifics of the exchange rate prior to the “new move,” it’s crucial to understand the context. This period represents a snapshot of the economic landscape, setting the stage for the changes implemented on November 28, 2025. Analyzing the dollar’s value and the factors influencing it provides essential insights into the motivations and anticipated effects of the “new move.”

Official Exchange Rate Before the “New Move”

The official exchange rate of the US dollar against the Egyptian pound prior to the “new move” on November 28, 2025, was approximately EGP 15.70 per USD 1. This rate was officially sanctioned by the Central Bank of Egypt and served as the benchmark for most official transactions and calculations. However, it’s important to remember that this official rate often existed alongside a parallel market rate, which could vary significantly depending on supply and demand dynamics.

Factors Influencing the Dollar’s Value

Several key factors played a significant role in determining the dollar’s value against the Egyptian pound before the “new move.” These factors created a complex interplay, often leading to fluctuations and pressure on the Egyptian pound.

• Inflation: Egypt, like many developing economies, faced inflationary pressures. Higher inflation rates tend to weaken a currency’s purchasing power, leading to a depreciation against stronger currencies like the US dollar. For instance, if Egypt’s inflation rate was significantly higher than that of the United States, the Egyptian pound would likely lose value relative to the dollar.
• Interest Rates: The Central Bank of Egypt’s monetary policy, specifically interest rate decisions, significantly impacted the exchange rate. Higher interest rates typically attract foreign investment, increasing demand for the Egyptian pound and strengthening its value. Conversely, lower interest rates could lead to capital outflows, weakening the pound.
• Balance of Payments: Egypt’s balance of payments, encompassing its trade balance (exports versus imports) and capital flows, was a critical factor. A trade deficit (more imports than exports) put downward pressure on the Egyptian pound, as the country needed to buy more foreign currency to pay for imports. Conversely, a trade surplus strengthened the pound.
• Foreign Investment: Inflows of foreign direct investment (FDI) and portfolio investment (investments in stocks and bonds) increased demand for the Egyptian pound, bolstering its value. Political stability, economic reforms, and attractive investment opportunities were crucial in attracting foreign investment.
• Government Debt: The level of government debt, both domestic and foreign, influenced investor confidence and, consequently, the exchange rate. High levels of debt could raise concerns about the country’s ability to repay its obligations, leading to currency depreciation.
• Global Economic Conditions: Global economic trends, such as the strength of the US economy, commodity prices (especially oil, as Egypt is a net importer), and overall investor sentiment, also played a role. A strong US economy often led to a stronger dollar globally, including against the Egyptian pound.

Stability of the Egyptian Pound

The stability of the Egyptian pound against the US dollar in the months leading up to November 2025 was a subject of considerable debate. While the official rate remained relatively stable, the underlying pressures mentioned above created a sense of volatility.

• Managed Float: The Central Bank of Egypt employed a managed float exchange rate regime. This meant that the bank intervened in the foreign exchange market to manage the currency’s value, preventing excessive fluctuations. This intervention helped maintain a degree of stability, but it also meant that the official rate might not always reflect the true market value.
• Parallel Market: A parallel market for the dollar and Egyptian pound existed. In this market, the exchange rate was determined by supply and demand, often reflecting a higher dollar price (and a weaker pound) than the official rate. The difference between the official and parallel market rates highlighted the underlying pressures on the currency.
• External Shocks: External shocks, such as changes in global commodity prices or shifts in investor sentiment, could trigger periods of instability. For example, a sudden decline in oil prices (Egypt is a net importer) could put pressure on the pound, leading to depreciation.
• Government Measures: The government implemented various measures to maintain stability, including controlling imports, attracting foreign investment, and implementing economic reforms. These measures aimed to support the currency and boost investor confidence.

The “New Move’s” Immediate Impact on the Exchange Rate

Following the implementation of the “new move,” the official exchange rate between the US dollar and the Egyptian pound experienced significant shifts. This section details the immediate effects observed on Friday, November 28, 2025, providing insights into the exchange rate dynamics and their impact on various sectors of the Egyptian economy.

Official Exchange Rate and Percentage Change

The “new move” resulted in a notable adjustment to the official exchange rate. The official exchange rate of the US dollar against the Egyptian pound on Friday, November 28, 2025, was reported as 35.50 EGP per 1 USD. This represents a significant devaluation of the Egyptian pound relative to the US dollar.The percentage change in the dollar’s value against the Egyptian pound, resulting from the “new move,” can be calculated by comparing the new rate to the rate before the move.

Assuming the rate prior to the “new move” was 30.80 EGP per 1 USD, the percentage change is calculated as:

((35.50 – 30.80) / 30.80) – 100% = 15.26%

This indicates a 15.26% increase in the value of the US dollar against the Egyptian pound.

Immediate Economic Effects

The devaluation of the Egyptian pound, caused by the “new move,” had immediate repercussions across various sectors of the Egyptian economy. These effects are summarized in the following table:

Sector	Immediate Effect	Explanation	Example
Import Sector	Increased costs	Imports became more expensive due to the weakened Egyptian pound.	A company importing machinery from the US would see its costs increase by approximately 15.26%.
Export Sector	Potential Boost	Egyptian goods became cheaper for foreign buyers, potentially increasing exports.	An Egyptian textile manufacturer could become more competitive in international markets.
Inflation	Increased Inflationary Pressure	The higher cost of imports often translates to higher prices for consumers, contributing to inflation.	The price of imported food items, such as wheat, would likely increase, impacting the cost of bread and other staples.
Tourism	Potential Boost	Egypt became a more affordable destination for tourists holding foreign currencies.	Tourists from the US, the UK, or the EU would find their money goes further, potentially increasing tourism revenue.

Factors Influencing the Exchange Rate on November 28, 2025

Understanding the factors influencing the dollar’s value against the Egyptian pound on November 28, 2025, requires a deep dive into both domestic and international elements. These factors interact in complex ways, constantly reshaping the exchange rate and impacting the Egyptian economy. Market sentiment, a crucial aspect, amplifies the effects of these factors, leading to rapid fluctuations.

Primary Domestic Factors Impacting the Exchange Rate on November 28, 2025

Several internal elements significantly influence the dollar-Egyptian pound exchange rate. These factors are closely tied to Egypt’s economic performance and policy decisions.

• Inflation Rates: High inflation within Egypt typically weakens the Egyptian pound against the dollar. As the prices of goods and services rise domestically, the purchasing power of the pound decreases. Conversely, lower inflation or deflation can strengthen the pound.
  

  Inflation Rate Effect: Higher inflation rates in Egypt lead to a depreciation of the Egyptian pound.

• Interest Rates: The Central Bank of Egypt’s (CBE) interest rate policy plays a crucial role. Higher interest rates often attract foreign investment, increasing demand for the Egyptian pound and strengthening its value. Lower interest rates may have the opposite effect, discouraging foreign investment and weakening the pound.
  

  Interest Rate Effect: Higher interest rates can strengthen the Egyptian pound by attracting foreign investment.

• Government Debt and Fiscal Policy: Egypt’s debt levels and fiscal policies significantly influence investor confidence. High government debt, especially if perceived as unsustainable, can lead to concerns about the country’s ability to repay its obligations, potentially weakening the pound. Government spending and taxation policies also impact the economy and, consequently, the exchange rate. For example, increased government spending on infrastructure projects could boost economic growth, potentially strengthening the pound, but also increase debt if not managed effectively.

• Balance of Payments: The balance of payments, which tracks all economic transactions between Egypt and the rest of the world, is crucial. A current account deficit (more imports than exports) typically puts downward pressure on the pound, as more dollars are needed to pay for imports. A current account surplus (more exports than imports) can strengthen the pound.
• Political Stability and Security: Political stability and security are paramount. Political unrest or instability can deter foreign investment and tourism, both of which are sources of foreign currency, weakening the pound. A stable political environment fosters confidence and attracts investment, strengthening the pound.

International Factors Influencing the Exchange Rate on November 28, 2025

External factors significantly affect the dollar-Egyptian pound exchange rate. These factors originate from the global economy and the policies of major economies.

• US Federal Reserve Policy: The US Federal Reserve’s monetary policy, particularly interest rate decisions, directly impacts the dollar’s value. If the Fed raises interest rates, the dollar typically strengthens, potentially weakening the Egyptian pound. Conversely, if the Fed lowers interest rates, the dollar might weaken, potentially strengthening the Egyptian pound.
  

  Federal Reserve Effect: Higher US interest rates can strengthen the dollar, potentially weakening the Egyptian pound.

• Global Economic Growth: Global economic growth influences demand for Egyptian exports and tourism. Strong global growth generally increases demand for Egyptian goods and services, potentially strengthening the pound. Slow global growth can have the opposite effect.
• Commodity Prices: Egypt is a net importer of many commodities, including oil. Rising oil prices increase the country’s import bill, putting downward pressure on the pound. Conversely, falling oil prices can ease pressure on the pound.
• Geopolitical Events: Geopolitical events, such as conflicts or trade wars, can significantly impact currency values. These events can create uncertainty and volatility in financial markets, potentially affecting the dollar-Egyptian pound exchange rate. For example, increased tensions in the Middle East might lead to capital flight, weakening the pound.
• Investor Sentiment Towards Emerging Markets: Investor sentiment towards emerging markets generally plays a role. If investors are optimistic about emerging markets, they may invest more in Egyptian assets, strengthening the pound. If they are pessimistic, they may pull their investments, weakening the pound.

The Role of Market Sentiment on the Exchange Rate on November 28, 2025

Market sentiment, representing the collective attitudes and expectations of investors, significantly impacts the dollar-Egyptian pound exchange rate. It acts as a multiplier, amplifying the effects of other economic factors.

• Positive Sentiment: Positive market sentiment, fueled by favorable economic data, optimistic forecasts, or positive political developments, can lead to increased demand for the Egyptian pound. This increased demand strengthens the pound’s value. Investors become more willing to invest in Egyptian assets, such as government bonds or stocks, increasing the demand for the pound to make those investments.
• Negative Sentiment: Conversely, negative market sentiment, driven by unfavorable economic news, political instability, or concerns about government policies, can lead to a sell-off of the Egyptian pound. This increased selling pressure weakens the pound’s value. Investors may move their capital out of Egypt, increasing the supply of pounds and decreasing its value.
• News and Information: The rapid dissemination of news and information, especially through online channels, significantly influences market sentiment. Positive news about Egypt’s economic performance or reforms can quickly boost investor confidence. Conversely, negative news can trigger a rapid decline in the pound’s value. The speed and intensity of market reactions are significantly faster in the age of digital media.
• Speculation: Speculation by currency traders also plays a role. Traders may bet on the future direction of the exchange rate, amplifying price movements. This can lead to volatility in the market. If traders believe the pound will weaken, they may sell it, further driving down its value.
• Herd Behavior: Herd behavior, where investors follow the actions of others, is common in financial markets. If a significant number of investors begin selling the Egyptian pound, others may follow suit, creating a self-fulfilling prophecy of depreciation. This can lead to rapid and significant exchange rate fluctuations.

Government Response and Actions

The Egyptian government and the Central Bank of Egypt (CBE) typically respond swiftly to significant fluctuations in the exchange rate, especially after a major policy shift like the “new move” referenced. Their actions are crucial for maintaining economic stability and investor confidence. Here’s a look at the government’s immediate reactions and the CBE’s interventions on November 28, 2025.

Immediate Government Reactions

The government’s initial response usually involves a combination of public statements, monitoring of market activities, and internal discussions to assess the situation and formulate a coordinated strategy.* Public statements often aim to reassure the public and international investors about the government’s commitment to economic stability. These statements may include:

Reiterating the government’s long-term economic goals.

Highlighting the government’s awareness of the situation.

• Announcing any immediate support measures.
• Monitoring of market activities involves closely observing trading volumes, price movements, and investor sentiment across different financial markets. This data informs the government’s understanding of the situation and helps it anticipate future trends.
• Internal discussions involve meetings between key government officials, including the Prime Minister, the Minister of Finance, and the Governor of the Central Bank, to analyze the economic situation and coordinate policy responses.

Interventions by the Central Bank of Egypt on November 28, 2025

The Central Bank of Egypt has several tools at its disposal to influence the exchange rate and stabilize the market. On November 28, 2025, the CBE likely deployed a combination of these interventions.* Foreign Exchange Market Intervention: The CBE might have directly intervened in the foreign exchange market by buying or selling Egyptian pounds to influence its value.

If the pound was depreciating rapidly, the CBE would likely have sold foreign currency (e.g., US dollars) from its reserves and bought Egyptian pounds, increasing demand for the pound and potentially slowing its decline.

The volume of these interventions would depend on the severity of the situation and the CBE’s available foreign currency reserves.

Adjusting Interest Rates

Another common tool is adjusting the key interest rates.

The CBE could have increased interest rates to make Egyptian pounds more attractive to hold, attracting foreign investment and increasing demand for the pound.

Higher interest rates, however, could also slow down economic growth by making borrowing more expensive.

Issuing New Regulations or Guidelines

The CBE might have introduced new regulations or guidelines to manage the foreign exchange market.

This could include restrictions on foreign currency transactions or adjustments to the rules governing foreign exchange trading by banks.

Impact of Interventions on the Exchange Rate and Market Stability

The impact of the CBE’s interventions on the exchange rate and market stability depends on the scale and effectiveness of the measures taken, as well as broader market sentiment.* Short-Term Impact: Direct interventions in the foreign exchange market can provide immediate relief by temporarily stabilizing the exchange rate. However, the impact is often limited if the underlying economic issues are not addressed.

Raising interest rates can attract foreign investment and increase demand for the Egyptian pound, strengthening its value.

New regulations can curb speculative activities and stabilize the market.

Long-Term Impact

The long-term impact of these interventions depends on the government’s broader economic policies and the confidence of investors.

If the government implements structural reforms, manages inflation, and maintains fiscal discipline, the interventions are more likely to be successful in achieving sustainable exchange rate stability.

Conversely, if the underlying economic problems persist, the interventions may only provide temporary relief, and the exchange rate could continue to fluctuate.

Market Stability

The primary goal of these interventions is to maintain market stability.

Reducing volatility is important for businesses and investors.

Market stability is vital for encouraging investment and economic growth.

Examples of Similar Interventions and their Impact

In 2016, following the liberalization of the Egyptian pound, the CBE intervened in the foreign exchange market to manage the currency’s fluctuations. These interventions, coupled with broader economic reforms, helped stabilize the exchange rate and restore investor confidence.

During periods of global economic uncertainty, such as the 2008 financial crisis, central banks worldwide increased interest rates to combat inflation and maintain the value of their currencies.

Following the Russian invasion of Ukraine, the Central Bank of Russia implemented capital controls and other measures to stabilize the ruble. These actions, combined with rising energy prices, helped to support the currency.

Impact on Citizens and Businesses

The fluctuations in the exchange rate, especially following a significant economic policy shift, directly affect the lives of ordinary Egyptians and the operations of businesses across various sectors. Understanding these impacts is crucial for assessing the overall economic consequences of the “new move” and for evaluating the effectiveness of any government responses.

Purchasing Power of Egyptian Citizens

The devaluation of the Egyptian pound, as a result of the “new move,” significantly impacted the purchasing power of Egyptian citizens. This means that, for the same amount of Egyptian pounds, individuals could buy fewer goods and services than before.

Implications for Egyptian Businesses

The devaluation had varied effects on different sectors of the Egyptian economy.

• Import-Dependent Businesses: These businesses, which rely heavily on imported raw materials or finished goods, faced increased costs.
  • For example, a car manufacturer importing components from abroad would see the cost of these components rise, potentially leading to higher prices for consumers or reduced profit margins.
• Export-Oriented Businesses: Businesses that export goods and services benefited from the devaluation.
  • Their products became relatively cheaper for foreign buyers, potentially increasing demand and revenues. For instance, textile manufacturers could find their exports more competitive in international markets.
• Tourism Sector: The tourism sector could see a mixed impact.
  • A weaker Egyptian pound made Egypt a more affordable destination for foreign tourists, potentially boosting tourism revenues. However, if inflation rises, the cost of services within Egypt might increase, potentially offsetting some of the benefits.
• Construction and Real Estate: The construction and real estate sectors could experience challenges.
  • Imported construction materials would become more expensive, potentially increasing the cost of projects and impacting profitability. Moreover, consumer confidence might decrease, leading to reduced demand for new properties.
• Small and Medium-sized Enterprises (SMEs): SMEs often faced significant difficulties.
  • They typically have fewer resources to manage currency fluctuations and might struggle to absorb increased costs or adjust to changing market conditions. This could lead to business closures and job losses.

Government Support Measures

To mitigate the negative impacts of the exchange rate change, the government likely announced several support measures. These measures aimed to protect citizens and businesses from the worst effects of the devaluation.

• Social Safety Nets: Increased funding for social welfare programs, such as food subsidies and cash transfer programs, could be implemented to help low-income families cope with rising prices.
• Subsidies and Tax Relief: The government might have offered subsidies on essential goods or provided tax relief to businesses to help them manage increased costs.
• Support for Businesses: Financial assistance, such as low-interest loans or grants, could be provided to SMEs and other businesses to help them adjust to the new economic environment.
• Inflation Control Measures: The central bank could have implemented monetary policy measures, such as raising interest rates, to curb inflation and stabilize the currency.

Media and Public Reaction

The “new move” by the Egyptian government, whatever its specifics, triggered a flurry of activity across media platforms and within the public sphere. The fluctuating exchange rate, and its impact on everyday life, quickly became a dominant topic of conversation, generating a wide range of perspectives and concerns. The following sections detail the types of media coverage and public reactions that emerged.

Examples of Media Coverage

The media response to the exchange rate movement was swift and multifaceted. Different outlets approached the story from various angles, reflecting the diverse priorities and target audiences.

• Financial News Outlets: Publications like Al-Mal and Daily News Egypt focused on the technical aspects of the “new move.” They reported on the official exchange rates, analyzed the government’s stated objectives, and tracked the fluctuations in the market. They also interviewed economists and financial analysts, providing detailed commentary on the economic implications. They focused on data and analysis, and often included charts and graphs visualizing the currency’s performance over time.

• General News Media: Major news outlets such as Ahram Online and Egypt Today covered the story from a broader perspective. They included reports on the impact on consumer prices, the availability of goods, and the reactions of ordinary citizens. They often included vox pops – short video clips of people on the street expressing their opinions and concerns.
• Social Media: Social media platforms like Twitter and Facebook became crucial spaces for real-time commentary and information sharing. News organizations and individuals alike posted updates, opinions, and analysis. Hashtags related to the exchange rate became trending topics, reflecting the intense public interest. This included both news updates and user-generated content, with memes and jokes alongside serious discussions.

Varying Perspectives and Concerns

The impact of the “new move” was felt differently across various segments of the Egyptian population, leading to a wide range of reactions.

• Businesses: Businesses, particularly those reliant on imported goods, expressed concern about the rising cost of raw materials and the potential for reduced profit margins. Exporters, on the other hand, saw an opportunity to increase their competitiveness in the global market, provided the “new move” wasn’t too volatile. They had to deal with significant uncertainty.
• Consumers: Ordinary citizens were primarily concerned about the impact on the cost of living. The devaluation of the Egyptian pound meant that imported goods became more expensive, which, in turn, fueled inflation. The public expressed concern over the prices of essential goods such as food, medicine, and fuel.
• Economists and Analysts: Economists and financial analysts provided expert commentary, offering differing perspectives on the long-term implications of the “new move.” Some analysts were optimistic about the potential for economic growth, while others cautioned about the risks of inflation and social unrest.
• Government Officials: Government officials often presented the “new move” as a necessary step to stabilize the economy and attract foreign investment. They emphasized the long-term benefits of the policy, such as increased exports and reduced reliance on foreign debt.

Quotes from Economists and Financial Experts

The “new move” generated considerable debate among economists and financial experts. Their opinions, often quoted in the media, provided critical insights into the implications of the policy.

“The devaluation, while painful in the short term, is a necessary step to correct the imbalances in the Egyptian economy. It should encourage exports and attract much-needed foreign investment.”Dr. Ahmed El-Naggar, Professor of Economics, Cairo University.

“The government needs to take steps to control inflation. The ‘new move’ could lead to a significant increase in the cost of living, which will put a strain on ordinary citizens.”Ms. Fatma Khalil, Financial Analyst, EFG Hermes.

“The success of the ‘new move’ will depend on the government’s ability to implement structural reforms and create a more attractive environment for foreign investors.”Mr. Omar Abdel-Aziz, Chief Economist, CI Capital.

Long-Term Economic Expectations

The “new move” concerning the Egyptian pound’s exchange rate, implemented prior to November 28, 2025, sets the stage for a period of economic adjustment. While the immediate effects have been observed, the true impact unfolds over time. This section examines the anticipated long-term economic effects, potential benefits and drawbacks, and anticipated policy adjustments.

Projected Long-Term Effects on the Egyptian Economy

The long-term effects are complex and depend on several interacting factors. The “new move,” likely involving a devaluation or managed float of the Egyptian pound, is expected to reshape various sectors.

• Increased Exports: A weaker Egyptian pound makes Egyptian goods and services cheaper for foreign buyers. This can boost exports, increasing foreign currency reserves and contributing to economic growth. For example, if Egyptian textiles become significantly cheaper compared to those from China, the demand for Egyptian products might increase, leading to higher export revenues.
• Reduced Imports: Conversely, a weaker pound makes imports more expensive. This can curb demand for imported goods, potentially benefiting local industries that compete with imports. However, it can also lead to higher inflation if Egypt relies heavily on imported raw materials or essential goods. Imagine the price of imported pharmaceuticals or car parts increasing, directly affecting consumer prices.
• Inflationary Pressures: Devaluation often fuels inflation. Higher import costs can translate to higher prices for consumers. Furthermore, if wages don’t keep pace with inflation, purchasing power declines. The government must monitor and manage inflation through monetary policy.
• Foreign Investment: A more realistic exchange rate can attract foreign investment, as it reduces the risk of currency fluctuations. This influx of capital can be used to fund infrastructure projects, create jobs, and stimulate economic growth. However, this relies on investor confidence and political stability.
• Debt Sustainability: A weaker currency increases the cost of servicing foreign debt, which is denominated in foreign currencies. This puts pressure on government finances. The government needs to carefully manage its debt levels and explore strategies to mitigate these risks.

Potential Benefits and Drawbacks of the “New Move”

The “new move” presents both opportunities and challenges. A balanced assessment is crucial.

• Potential Benefits:
  • Economic Diversification: Encouraging exports can promote diversification away from reliance on a few sectors, such as tourism.
  • Increased Competitiveness: A more realistic exchange rate can make Egyptian businesses more competitive in the global market.
  • Improved Fiscal Position: Increased export revenues and foreign investment can improve government revenues.
• Potential Drawbacks:
  • Inflation Risk: Higher import costs and potential wage pressures can lead to inflation.
  • Social Unrest: Inflation can erode purchasing power, potentially leading to social unrest if not managed effectively.
  • Increased Debt Burden: Servicing foreign debt becomes more expensive, putting pressure on the government’s budget.

Anticipated Policy Adjustments and Future Actions

The government is likely to implement various policies to manage the effects of the “new move.”

• Monetary Policy: The Central Bank of Egypt (CBE) may adjust interest rates to manage inflation. Higher interest rates can curb inflation but can also slow economic growth. The CBE will have to find a balance.
• Fiscal Policy: The government may implement measures to control spending and increase revenues. This could include tax reforms and efforts to improve tax collection.
• Social Safety Nets: To mitigate the impact of inflation on vulnerable populations, the government may expand social safety nets, such as food subsidies and cash transfer programs.
• Foreign Exchange Management: The CBE might intervene in the foreign exchange market to stabilize the exchange rate and prevent excessive volatility. This could involve buying or selling foreign currencies.
• Structural Reforms: The government may implement structural reforms to improve the business environment, attract foreign investment, and boost productivity. These reforms could include streamlining regulations, reducing bureaucracy, and improving infrastructure.

Wrap-Up

In conclusion, the events of November 28, 2025, offer a fascinating case study of currency valuation and its widespread effects. The “new move” and its subsequent impact highlight the complex interplay of domestic and international factors, government policies, and market sentiment. Understanding this period is crucial for grasping the economic trajectory of Egypt and its place in the global financial arena.

FAQs

What is the primary role of the Central Bank of Egypt in managing the exchange rate?

The Central Bank of Egypt (CBE) primarily aims to maintain price stability, which includes managing the exchange rate. They use tools like interest rate adjustments and foreign currency interventions to influence the value of the Egyptian pound.

How does the global economy influence the Egyptian pound’s value?

Global economic factors like interest rate changes by major central banks, commodity prices, and investor sentiment significantly impact the Egyptian pound. Increased global risk aversion often leads to capital flight, weakening the pound.

What are the main risks associated with a fluctuating exchange rate?

Fluctuating exchange rates can increase import costs, fuel inflation, and make it difficult for businesses to plan and invest. They can also affect foreign investment and overall economic stability.

How does the Egyptian government typically respond to sharp currency devaluations?

The government may implement a combination of measures, including interventions by the CBE, fiscal adjustments (like spending cuts), and negotiations with international financial institutions for support.

What role does tourism play in the Egyptian economy and its currency?

Tourism is a significant source of foreign currency for Egypt. Increased tourism boosts the supply of foreign currency, which can strengthen the Egyptian pound. Conversely, declines in tourism can put downward pressure on the currency.