Core Viewpoint - The Egyptian pound (EGP) has strengthened significantly, reaching a near one-year high, with expectations that the USD/EGP exchange rate will fluctuate between 45 and 49 by the end of 2025 [1][2][6] Exchange Rate Trends - The EGP has shown stability and slight appreciation this year, with the USD/EGP rate around 48.5, up approximately 5% from 50.84 at the beginning of the year [2] - The Egyptian pound's strength has exceeded previous forecasts, with Fitch Solutions predicting a rate of 50 to 55 by 2025 [2] Macroeconomic Indicators - Inflation in Egypt has decreased from 24.1% in December 2024 to 13.1% in July 2025, supporting the EGP's stability [2] - Net international reserves increased from $47.1 billion at the end of 2024 to $49 billion by July 2025 [2] Factors Supporting EGP Strength - External factors such as a weakening USD and potential Fed rate cuts, combined with internal factors like increased foreign reserves and a stabilizing current account, have created a favorable environment for the EGP [4] - Significant foreign currency inflows from agreements with the UAE and other financing sources have bolstered foreign reserves [4] - Strong performance in tourism and remittances, along with improved trade balance, have also contributed to the EGP's strength [4] Investment Climate - Analysts believe the strong EGP will help the Egyptian government more effectively control inflation and accelerate interest rate cuts [3] - The increase in foreign capital inflows into Egypt's debt market and a stable monetary policy are seen as key pillars for exchange rate stability [5] Future Outlook - Experts predict that the EGP will remain stable in the short term, with potential for slight appreciation if the USD continues to weaken [6] - The EGP is expected to fluctuate between 48 and 49 in the coming months, with strong support at 47 and resistance at 50 [6] - However, the stability of the EGP is conditional, and any delays in economic reforms could undermine investor confidence [6]