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Egypt’s Black Market Dollar Value Reaches Historical High, Exceeding 70 EGP

January 30, 2024
Image Credit: Olia Danilevich/Pexels

The Egyptian pound’s depreciation in the black market reached a new historical high this week, surpassing 70 EGP against the US Dollar, which is over 50 percent of the official rate.

Despite remaining anchored at 30.80 EGP per USD since the last Central Bank adjustment in January 2023, the official exchange rate faces growing pressure from the parallel market’s escalating rates.

Addressing the ongoing currency fluctuations, Egyptian President Abdel Fattah El-Sisi recently acknowledged the historical challenge posed by the US dollar. During the celebrations of Police Day held on 24 January, he noted the recurring issue of dollar fluctuations impacting Egypt every few years due to the state’s reliance on dollar-denominated services, while its revenue comes primarily in Egyptian pounds.

He expressed appreciation for the “resilience of Egyptians” amidst economic pressures and highlighted the government’s proactive approach.

“We have presented a vision to address the dollar crisis,” he stated, emphasizing their commitment to tackling the challenge.

Egyptian billionaire Naguib Sawiris called on the government to unify the official and black-market exchange rates, arguing that it is crucial to tackle the nation’s foreign currency shortage.

He warned on social media that further delay in adopting reforms would only worsen the already critical situation. “Postponing reforms is a disaster that will increase the extent of the critical situation we are in,” he said.

In December 2023, HSBC’s recent forecast anticipated a devaluation to EGP 40-45 against the US dollar in the first quarter of 2024, potentially straining Egypt’s import costs and impacting local purchasing power.

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