Egypt's Economy Maintains Positive Momentum as Foreign Reserves Reach Historic Highs

Cairo - EcoPulse24

Egypt’s economy continued on a positive path in the first week of 2026, bolstered by a historic increase in foreign currency reserves and a continued decline in the US dollar against the Egyptian pound. The Egyptian Exchange (EGX) showed mixed performance ahead of the Christmas holiday break on Wednesday, January 7. The Central Bank of Egypt (CBE) reported foreign reserves reaching a record $51.451 billion at the end of December 2025, up from $50.215 billion in November - a monthly increase of $1.236 billion (2.4%), the highest level in Egypt's history.

Foreign Reserves See Historic Surge, Up $4.3 Billion Year-on-Year

This milestone in reserves marks a turning point for Egypt’s economic performance, with a year-on-year increase from $47.109 billion in December 2024 to $51.451 billion in December 2025 - a $4.343 billion (9.22%) rise. December’s jump of $1.236 billion reflects the success of CBE’s policies in boosting dollar resources. Reserve components grew steadily: gold holdings increased by $914 million to $18.17 billion, while foreign currencies rose to $33.232 billion, up $327 million month-on-month. The reserves comprise a diversified basket including the US dollar, euro, British pound, Japanese yen, and Chinese yuan, distributed according to CBE's risk management strategy.

Egyptian Pound Strengthens; US Dollar Drops to EGP 47.25

The US dollar saw a notable decline against the pound in early January, trading at around EGP 47.25 (buy) and EGP 47.35 (sell) in most banks on Wednesday, January 7, compared to EGP 47.56/47.66 at the week’s start - a drop of over 30 piasters in a few days. The Central Bank posted rates at EGP 47.28/47.38, with major banks quoting similar figures. The dollar’s fall coincides with improved foreign currency inflows, as remittances from Egyptians abroad hit a record $37.5 billion in the first eleven months of 2025 - a 42.5% increase year-on-year. Standard Chartered revised its dollar-pound forecast, expecting EGP 47.5 per dollar in Q1 2026 and EGP 49 by year-end, citing gradual improvement in the forex market.

Egyptian Exchange Sees Mixed Trading, Official Holiday

The EGX saw mixed trading in the first week of 2026, falling on Sunday and Monday before rebounding strongly on Tuesday. The EGX30 index closed Tuesday, January 6, up 2.13% at 41,543 points, driven by foreign investor net buying of EGP 213 million, while Arab and Egyptian investors were net sellers. Market capitalization rose by EGP 51 billion to EGP 2.985 trillion. The exchange and banks were closed on Wednesday, January 7, for the Christmas holiday, resuming Thursday, January 8.

Private Sector Expands for Second Month; Positive Inflation Outlook

A business survey showed Egypt’s non-oil private sector expanded for the second consecutive month in December, despite a slower growth pace, benefiting from increased new orders and slight production growth. The CBE expects headline inflation to decline gradually, nearing its 7% (+/-2%) target by Q4 2026, with an average of 14% in 2025 and 10.5% in 2026, down from 28.3% in 2024. An alternative scenario sees a temporary uptick in inflation in 2025, before resuming its downward path in Q2 2026. Fiscal measures like adjustments to energy, tobacco, and electricity prices could affect the pace of inflation decline.

Key Economic Indicators

• Official holiday: EGX and banks closed Wednesday, January 7 (Christmas)
• Work resumes: Thursday, January 8, 2026
• Foreign reserves: $51.451 billion (record high)
• US dollar rate: EGP 47.25 (buy) / EGP 47.35 (sell) as of Wednesday
• Remittances: $37.5 billion (Jan-Nov 2025)

Tables with detailed monthly reserves, reserve components, forex rates, EGX performance, and investor flows support these trends. Egypt aims for 5.3% GDP growth in FY 2026, with non-oil sectors comprising about 56% of GDP. Economists expect remittances to surpass $40 billion in 2025, strengthening Egypt’s ability to meet essential import needs and external debt obligations.