Pound hits its weakest level since May as the petroleum import bill widens by a third

The dollar closed at 53.18 Egyptian pounds on Wednesday 14 October, its highest level against the pound since 19 May, according to Central Bank of Egypt data reported by Al Manassa. On the same session, foreign investors recorded net sales of Egyptian treasury bills on the Egyptian Exchange of EGP 5.8bn, about US$109m. One session is not a trend, and should not be read as one. The mechanism behind the move sits in the external accounts: the balance of payments for the fiscal year ended June showed Egypt’s petroleum trade deficit widening 31.5 percent year on year, driven by higher import volumes of natural gas and crude oil. That is the channel through which any sustained move in energy prices reaches the exchange rate, the import bill and the subsidy line.

The explanations offered are attributable opinion rather than established cause. Ali Metwally of Mosaic Economics told Al Manassa that “rising global energy prices could be a catalyst for increased dollar demand in Egypt.” Mina Rafik of Prime Investment said that “higher interest rates on US bonds and expectations that the Federal Reserve will continue hiking rates, combined with forecasts that the Central Bank of Egypt will hold its rates steady during its upcoming 2026 meetings, may push investors to exit the market,” and attributed the dollar’s rise partly to outflows driven by fears of regional escalation. One widely recirculated claim — that Brent crude is trading above US$100 a barrel — appears in aggregator copy we could not corroborate from any wire or settlement data, and we are not carrying it.

Assessment: The weak point in the week’s numbers is not the pound but the arithmetic underneath it. A 31.5 percent widening in the petroleum deficit is a structural exposure: it converts a price move abroad into a currency move at home without any policy decision in between. Note also an unreconciled figure in the same accounts — Suez Canal revenue for FY2025/26 was reported around 12 October by Egyptian financial outlets at US$4.4bn on the central bank’s balance-of-payments basis, against the US$4.6bn announced by the Suez Canal Authority chairman before the fiscal year closed. A measured number and an announced one are not interchangeable, and we have not settled which belongs in a series.