Egyptian pound hits record low as Mideast war roils markets

Egypt’s currency falls to a record low, trading at over 52 to the US dollar, as the economic fallout of the war in the Middle East hits the region’s most populous country and Israel’s southern neighbor.

The US-Israeli war on Iran has expanded across the Gulf and beyond, upending global energy markets and trade, and virtually halting traffic in the Strait of Hormuz, through which a fifth of the world’s crude oil travels.

Egpytian President Abdel-Fattah el-Sissi last week warned that the country was in a “state of near-emergency,” warning of renewed inflationary pressures.

Despite Egypt not having been directly hit by the war, the fighting has nonetheless pushed some shipping companies away from its Suez Canal, a key source of foreign currency.

Egypt’s import-dependent economy has proved highly sensitive to currency fluctuations in the past.

Inflation — 11.9 percent in January — peaked at nearly 40% in August 2023, on the back of a punishing economic crisis that has since eased, thanks in part to an over $50 billion bailout, mainly from the United Arab Emirates.