Concerns among Egypt's population that another devaluation of the local currency is looming are most probably unfounded, according to analysts.
The Egyptian pound dropped to its lowest official rate last week when one US dollar began trading for 50 pounds. Before the latest drop, the dollar had been trading between 48 and 49 pounds.
The pound has continued to depreciate marginally against the US dollar over the past week and the exchange rate on Friday morning at the Central Bank of Egypt was 50.82 pounds per US dollar.
The pound was devalued in March to qualify for increased IMF funding, declining in value by over 60 per cent. The devaluation, the fourth since 2022, significantly raised the cost of living across the board to the detriment of millions of Egyptians whose incomes have not increased enough to account for it.
While the recent drop in the currency’s value was not significant, it has resulted in concern among importers and manufacturers whose livelihoods are directly affected by the fluctuations. Most industries in Egypt regularly require imported components to keep their operations going.
People are also concerned that food, transportation and other routine costs will increase as well.
“The fifty-pound-mark is a psychological threshold for many Egyptians. It isn’t entirely rational but I think this is why there is such an uproar over this latest drop in the value of the pound,” said Karim El Omda, an economist, "There's no reason to assume that the government will devalue, in fact the consensus is that the USD will come back down to 49 or 50 once all the disruptions from the US elections are over."
The drop in the currency's value came after remarks by Prime Minister Mostafa Madbouly two weeks ago advising Egyptians “not to panic” should any decreases in the value of the pound be recorded.
“We are operating under a flexible exchange regime now and marginal increases and decreases are only normal,” he said on November 28. The IMF and Fitch Solutions have confirmed that the country is currently operating an entirely market-determined exchange rate.
However, Mr El Omda argued that without the black market, which was eliminated by the government this year, it is difficult to ascertain whether a genuine supply and demand system free from government intervention is in place.
“I am not convinced that the exchange rate is entirely flexible as it would be very destabilising for a system that has regulated its financial markets for so long. I also don't think it would be advisable for them to do that yet,” he said.
Despite Mr Madbouly's intentions to dispel fears in the market, his speech had the opposite effect, according to financial analyst Mohamed Ragab, who told The National that the consensus among many Egyptian economists at the moment is that the speech was a “bad idea” as it spooked some businesses into raising their prices.
The country’s telecoms companies have announced a price increase of 30 per cent, effective January 1.
“Many economists, me included, were left scratching our heads a little after we saw Mr Madbouly’s speech. Perhaps he was aiming to be transparent or he was concerned by a recent increase in hot cash leaving the central bank’s coffers, there could have been many reasons, however, the result was a great deal of anxiety,” Mr Ragab said.
According to him, the appreciation of the dollar has also made some investors pull their money out of Egypt’s debt instruments, which the government continues to rely heavily on for its short-term financing needs.
The Trump effect
The marginal increase in the US dollar’s value was attributed by Mr Madbouly to an increase in investor confidence that has taken over US financial markets since Donald Trump’s victory in November’s US presidential election.
“The dollar has strengthened against a number of currencies over the past few weeks. These include the euro and the yuan. Both of their values against the Egyptian pound have decreased over the same period that the dollar has risen,” Mr Ragab said.
Another reason the dollar has appreciated against the Egyptian pound is a recent rise in forex demand for imports by Egyptian businesses preparing for the Ramadan season (which always comes with a sharp rise in consumption), which is only three months away, he said.
Economic recovery
However, the dollar is not likely to increase by much against the pound in future months, the analysts said.
“The main obstacle to the country’s economic recovery right now is geopolitics. That is also the part that remains unpredictable about the new fiscal year, which has made predictions by international financial institutions less reliable and more tentative,” Mr Ragab said.
Revenues from Egypt’s Suez Canal, one of the country’s main sources of foreign currency, have dropped by between 50 and 60 per cent because of disruptions to Red Sea shipping by Houthi rebels in Yemen acting in solidarity with Hamas in Gaza and its continuing struggle against Israeli military aggression.
With 2025 weeks away, Egypt’s economic position is much better than it was last year, with net foreign reserves up by $11 billion and external debt decreasing to just over $152 billion when it was about $168 billion at the end of last year.
These improvements were largely made possible by an influx of $35 billion from the Ras El Hekma deal between the Egyptian government and a UAE-led consortium. The government also finalised several other financing deals this year, which contributed to the improvement in the country’s external position.
“Egypt was fortunate to receive so much assistance from our neighbours and international partners. But we mustn't forget that these were bailouts from external sources and not a result of the government’s policies,” Mr El Omda said.
The Central Bank of Egypt sold local treasury bills in various tenors, amounting to over 450 billion pounds between November 1 and December 12.
The government's continued reliance on debt instruments and hot cash remains a concern that it will have to deal with later when the economy has recovered past the “critical stage”, he said.
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
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The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Reputation
Taylor Swift
(Big Machine Records)
The%20specs
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
RESULT
Norway 1 Spain 1
Norway: King (90 4')
Spain: Niguez (47')
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Global state-owned investor ranking by size
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Harry%20%26%20Meghan
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FA Cup semi-finals
Saturday: Manchester United v Tottenham Hotspur, 8.15pm (UAE)
Sunday: Chelsea v Southampton, 6pm (UAE)
Matches on Bein Sports
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Mohammed bin Zayed Majlis
Day 2, Dubai Test: At a glance
Moment of the day Pakistan’s effort in the field had hints of shambles about it. The wheels were officially off when Wahab Riaz lost his run up and aborted the delivery four times in a row. He re-measured his run, jogged in for two practice goes. Then, when he was finally ready to go, he bailed out again. It was a total cringefest.
Stat of the day – 139.5 Yasir Shah has bowled 139.5 overs in three innings so far in this Test series. Judged by his returns, the workload has not withered him. He has 14 wickets so far, and became history’s first spinner to take five-wickets in an innings in five consecutive Tests. Not bad for someone whose fitness was in question before the series.
The verdict Stranger things have happened, but it is going to take something extraordinary for Pakistan to keep their undefeated record in Test series in the UAE in tact from this position. At least Shan Masood and Sami Aslam have made a positive start to the salvage effort.
South Africa's T20 squad
Duminy (c), Behardien, Dala, De Villiers, Hendricks, Jonker, Klaasen (wkt), Miller, Morris, Paterson, Phangiso, Phehlukwayo, Shamsi, Smuts.
MATCH INFO
What: India v Afghanistan, first Test
When: Starts Thursday
Where: M Chinnaswamy Stadium, Bengalaru
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
RESULT
Bayern Munich 0 AC Milan 4
Milan: Kessie (14'), Cutrone (25', 43'), Calhanoglu (85')
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
AndhaDhun
Director: Sriram Raghavan
Producer: Matchbox Pictures, Viacom18
Cast: Ayushmann Khurrana, Tabu, Radhika Apte, Anil Dhawan
Rating: 3.5/5
